Drowning In A Sea Of Drought

We just paid $2.25 more for a bag of horse feed than we did a month ago – a jump of over 25%.  We weren’t happy about, but we only have three horses, so we’ll find a way to work it into the household budget.  What was hard to watch was the dairy farmer who had come to make his regular weekly purchase of 200 bags of feed for his cows.  He simply didn’t have the extra $450.  Over the course of a month that means another $2,000 to him.  It isn’t in his budget, and he had to tell the men at the loading dock to remove some of the bags.  He said that he was going home to talk to his wife about how they were going to deal with their herd.  He has only two real options – sell some of his cows or slaughter them.  He can’t make ends meet selling milk if feeding his cows will eat up every bit of his profit and more.  He’s not the only farmer making hard decisions.  It’s happening all across the country.

I think it took that scene at the supply store to make this Summer’s weather conditions a reality for me.   There just isn’t going to be enough corn – not for us, not for livestock or poultry and not for fuel – not unless we do something about it.   In the last couple of months the price of a bushel of corn has risen over 60% from $5.51 per bushel to today’s price which is hovering around $8.40.   Take a look at the agricultural commodities market and you’ll see that soybeans have risen from $10.95 to $17.34 and that wheat is up to $9.42 from $5.78.   Given the very basic and simple rules of supply and demand, this means that all of us are going to have to take a long hard look at our checkbooks.  We’re going to have to find ways to pinch those pennies a little tighter while we shop for food and fill our gas tanks.  The crops for 2012 are yielding approximately 15-20% less than in previous years and they can’t be recovered.  You can’t make something grow without a little help from Mother Nature, and the growing season is quickly coming to an end.

Climatologists are reporting that this is the first of many signs that global warming is a real threat to our planet.  That may very well be, but it isn’t just the severe drought conditions that are driving those prices.    Government regulations require that 40% of corn crops be converted into biofuel, forcing farmers to devote less and less land to growing other crops.    Market speculators, seeing huge investor profits, have nearly tripled their trading in agricultural commodities, and that was only between June and July.  Profit driven motives, in the world of trading, can skew everything and throw the supply and demand model right out the window.  Fears over war between Israel and Iran, along with the ongoing fighting in Syria, have forced some of their neighbors in the Middle East to stockpile both food and oil supplies.   China and Japan are facing their own fears and are responding by releasing some of their own grain reserves, impacting the normal flow of global exports and imports.   It has all the makings of the perfect storm for a world that is already skittish about the economic situation.

Here in the United States, there has been some talk by members of Congress about easing up on those ethanol regulations.  The United Nations’ Food and Agriculture Organization has appealed for the suspension of the EPA requirements.  It’s a sort of food-or-fuel debate.  The problem is that it probably won’t happen until 2013, and that’s being optimistic.    The ethanol and fuel oil producers have already set the wheels in motion for business as usual.  To change their operations will take time.   The debate in Washington, like almost everything else there, is sharply divided and being argued in the two different languages of partisan politics, something that even a translator can’t help.    We also have to take into account that we’re in an election cycle, and few candidates are willing to take on any challenge that could very well mean a loss of campaign contributions.   Groups with very diverse interests – from the National Cattlemen’s Association to the Corn Grower’s Association to myriad environmental organizations – have been whispering in the ears of lawmakers and writing checks to ensure that they can be heard.

Should those in power decide to enter into some real discussions and make actual changes to the ethanol issue, there is a very good chance that the situation could improve.  Economists and experts in both the fields of energy and agriculture have offered some suggestions as to how different scenarios could work.  Each variation shows what type of impact there would be given how much or how little the EPA standards are relaxed.  The other variables, according to an article presented by Purdue University, would be “the price of oil, the price of corn, the magnitude of the drought, the economics of switching away from ethanol and the technical flexibility of refiners and blenders.”*   Even a compromise, from all involved, would be better than just doing nothing.    These are actual ways in which the further harm to the environment would be limited, while also allowing for Americans to buy groceries and drive to work.  In the meantime, while they’re either arguing or ignoring the problem, we’ll be waiting and prices will keep going up.   We might have to tighten our belts another notch, but that won’t be hard, because we’ll probably be eating less and walking more.


* “Potential Impacts of a Partial Waiver of the Ethanol Blending Rules”; Jay Akridge, Dean of Agriculture for Purdue University and Neil Conklin, President of the Farm Foundation, NFP;  August 16, 2012

References – Business Week, Bloomberg Report, CNNMoney, The Chicago Tribune,  and the Agricultural Marketing Research Center

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19 Responses to Drowning In A Sea Of Drought

  1. klmh says:

    Ethanol blew up an engine on a little toyota truck of ours many years ago, and it damaged our riding lawn mower. I started to use the non-ethanol fuel and noticed a mile or so a gallon more usage from my car. Interestingly enough, recently the fuel with ethanol is more expensive than without, so its a win, win for us.
    I think about you and others with horses and livestock now. Our pasture was being used by a rancher that needed a place for his cattle, and he just pulled them off of it because there is nothing, nothing but dirt out there now. All the scrub brush and trees up to a certain height have been trimmed, and not in a good way.
    Our horses are now gone, due to old age, but I am happy not to be paying for their feed. Also our water prices are rising again. I dearly miss my horses though.
    Its sad that we could not get something done about global warming in the Clinton years. The signs were there, the melting taking place, the rising of the oceans, the weather patterns changing, and other countries recognized it, yet we couldn’t see the forest for the trees. Well, the trees are dying and some are now seeing the light. A little too late…

    • klmh, Our pastures are pitiful right now. We’re not even bothering to reseed until the heat dissipates and the rain comes. Even with irrigation it would be a waste of time, money and energy – I am happy that we have well water, though – that’s one less expense. In the meantime, I’m keeping my fingers crossed that our hay stays at a reasonable price or the horses will be eating at Mickey D’s – ride-though window, of course.
      Reading some of the articles, I did see that there were problems with ethanol, as you said, causing engine trouble. I didn’t go much further than that or this post would have turned into a real homework assignment.

      • klmh says:

        I hope you get some rain too soon. We have a slight possibility this weekend, and the temps have decreased to a lovely 96 degrees. Still beats the 114 we were having…
        Best of luck.

  2. codystl says:

    Thanks for writing this. It’s amazing the ripple effect this drought will cause. And we (us city folk) will not really see the full effect for many months from now. Who cares about my hostas!

    • cody, I’m almost embarrassed to admit that if I hadn’t heard the plight of that dairy farmer, I wouldn’t have given the situation the attention I probably should have. So I guess I have him to thank for waking me up and realizing that it’s not an isolated problem. Take care of those hostas!

  3. Donna says:

    Our government is horrible. Hemp can be used to make biofuel, growing hemp is against the law in most states. It has many uses. Paper can be made from it, thus saving our forests.

    • “Our government is horrible.” Donna, I have to tell you, you certainly don’t mince words.
      BTW, I haven’t given up on that project. There’s more to that hemp thing than I ever imagined, and I’ve found mountains of info. Thank you.

  4. Stephanie Collore says:

    I would LOVE to send them ALL our Florida rain. Our pastures are flooded, we have hoof rot and mosquitoes as big as Buick s!

  5. Hi Empress,
    The powers that be should allow the corn to be sold for food & not to make biofuel. So far, it’s not happening. Another disaster that is going to make 2013 potentially a very very bad year. That’s after we fall off of the “fiscal cliff.” Hoard those food supplies, for the animals & your own use folks.

    I do hope the dairy farmer can get some relief. Most of the middle of the country is going to be declared a federal disaster area (not sure of the correct govt speak for it) and federal dollars will be made available to the farmers who have lost their crops. I hope that includes the farmers trying to feed their livestock.

    The Mayans didn’t know the half of it!

    • Hi bsf, The folks that know about these things, and that doesn’t mean politicians or lobbyists, are in agreement with you. Even a temporary suspension of the regulations would go a long way in helping all of us make it through the next year. People are already making such difficult decisions with their dollars. I’d like to think that our farmers are also considered too big to fail – that’s a bailout I’d support.
      LOL re: the Mayans – smart people. 😉

    • Donna, I really liked this article. The section where the farmers expressed concerns about being “Walmart-ized” by huge corporations was interesting. Thanks for bringing the link here.

  6. Jake from State Farm says:

    I can’t imagine anything harder than making a living off the land. I hope everything works out for your farmer friends.

  7. Morning All.. The County where we currently reside OKEECHOBEE FL is beef and dairy land.. These guys/gals are having a rough time..And we have RAIN here…. Some have taken to planting their land with new potatoes, beans etc to sell at fresh farmers markets…BUT of course the GOOBERMENT has to get involved and start with the whole ..you need a license and all that other BULLSHIT..BUT nothing is ever done to the FOOD ROAD SIDE STANDS..UM health dept anyone..??? One guy gets away from it because he is on private property…does not have a sign out..and just sits out there BBQ’ing and people JUST happen to stop by…UM SURE…
    So I found this article in the local paper and thought I would share.. I was taught how to grocery shop by my Mom many many moons ago and how to cook and bake as there was 8 kids in the household and money was tight…I still shop the same way and make the dollars stretch..
    I have learned how to get min 4 meals out of one cooking session and freeze for the following week. Same with baked goods.. FREEZER BAGS are your best friend..for sauces I double bag and then heat them up in a pan of hot water.
    Hold on folks… it’s gonna get a whole worse before it gets better I am afraid..


    Hugs and Peace

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