Worst drought since 1954
If you’ve been keeping up with the news this year, you’ve probably heard that there was a widespread drought that covered much of the United States this year. The drought affected many states and actually covered 80% of the U.S. It’s on record as being the worst drought since 1954.
This obviously had some devastating effects for farmers who depend on the rain to irrigate their crops. Unfortunately much of the corn didn’t get enough water, so it’s growth was stunted, and much of it did not mature into grain. According to the USDA, this is the smallest corn harvest in the last 6 years. On top of that, the average yield was only 122 bushels per acre, the lowest since 1995.
The drought affects you
This has had some catastrophic ramifications. The price of corn skyrocketed this summer, and corn futures reached $8.49 per bushel in August. This obviously affects you. Corn is in everything. Corn is used in foods in the form of high fructose corn syrup, and maltodextrins to sweeten foods. Corn is also in fuel, and used to feed livestock. So high corn prices will undoubtedly translate into higher food prices in the store.
** Corn futures this summer, you can see the price skyrocketing**
The drought affects dairy
High corn prices have really affected the dairy industry. Cows that are milking need a lot of energy, so corn is one of the energy sources we feed our cows. Unfortunately the cost of milk has not gone up as fast as the corn price went up. Dairymen, as a result, have had to buy more expensive inputs, all while getting the same price for their milk.
The droughts effect on California dairy
**On our farm, we use these sprinklers**
Farm wise, the drought had little effect on California agriculture. California farmers irrigate their crops so they don’t have to depend on the weather. I remember the first time I went to the Midwest though. I was wondering how you irrigate a field that has hills. Up until then I didn’t realize that many farmers actually rely on the weather to irrigate their crops.
But California dairies have been hit hard by the drought in a much different way. In California, most of the corn is imported by rail from the Midwest. So dairymen in California generally have a higher cost for feed. Also our milk pricing system is different than the rest of the U.S. so our milk price is generally much lower than other places in the U.S. So California dairymen have had a real disadvantage compared with the rest of the U.S.
Unfortunately this has caused a large number of dairies (large and small) in California to go out of business. In fact, these are good dairymen going out of business not because they were poor managers, but because they only failed to manage their feed costs effectively. So it’s been a rough ride trying to stay in business.
Read more about the droughts affect on California dairy here.
Looking brighter
Things are looking brighter though. The milk price is finally catching up so dairies will hopefully be profitable again soon. Also global demand looks good with Rabobank citing global scarcity for the next 12 months. So after a rough summer, we will hope that things really do improve.
