Drought is Worst in Half Century
On July 16 the National Climatic Data Center reported that the current drought in the Corn Belt and more than half of the U.S. is the worst in 50 years, causing sharp increases in corn prices and pressuring food prices. Although agriculture represents a small percentage of the U.S. economy, the decline in production is an obstacle to the nation’s economic recovery. The report from the climate center comes one week after the Department of Agriculture declared a natural disaster in more than 1,000 counties in 26 states. According to the report, approximately 55 percent of the continental U.S. is now designated as in moderate to severe drought, the most widespread drought since December 1956. Since May the price of a bushel of corn has increased by more than 50 percent, to $7.72. Bill Lapp, president of Advanced Economic Solutions, a commodity consulting firm based in Omaha, said that at least 10 percent of the corn crop has been lost and as much as 20 percent could be lost. Many of the farmers who suffer losses from the bad weather are covered by insurance.