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The Drought of 2012 revisited

The Drought of 2012 revisited. AG BM 102. Corn Supply ( Bil . Bu .). Source: USDA. Corn Usage ( bil . bu ). Source: USDA. Food and Industrial Corn Use mil. bu. Source: USDA. Corn Usage. December Corn Contract August 23. Effect of 2012 Drought on Farmers. Crop farmers

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The Drought of 2012 revisited

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  1. The Drought of 2012revisited AG BM 102

  2. Corn Supply(Bil. Bu.) Source: USDA

  3. Corn Usage (bil. bu) Source: USDA

  4. Food and Industrial Corn Usemil. bu. Source: USDA

  5. Corn Usage

  6. December Corn Contract August 23

  7. Effect of 2012 Drought on Farmers • Crop farmers • Without crop insurance huge losses • Animal farmers • Major inputs much more expensive • Cow-calf operators – lack of grass extremely serious – western plains • Although animal prices will rise, not immediately – asset fixity • Generally losses esp. for those buying lots of feed (California dairy farmers)

  8. 2013 Crop • Corn & soybeans much lower – much bigger crops • Dry weather in western Corn Belt an issue • Also wet weather in South

  9. Some important points • Farm prices are MUCH more volatile than retail prices! • Consumers can adjust their consumption easier than a farmer can adjust a feed ration • It is a global market for most agproducts • Drought induced Brazil to raise corn – in future US share will be smaller

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