Drought Moves to Midwest

Bloomberg BuisnessWeek reports the drought in the U.S. Midwest that has pushed up corn prices 28% since June 15, may eventually rival a dry period in 1988 that cost agriculture $78 billion, a government meteorologist said.

This year’s weather pattern resembles those of a quarter century ago, Matthew Rosencrans, a drought specialist with the National Weather Service, said recently at a forum in Washington. Sparse rainfall may drive crop costs up further, destroying livestock profits and raising food prices, said David Anderson, an agricultural economist at Texas A&M University.

“Everyone’s worried about this,” Anderson said in an interview after speaking at the forum. Corn “stockpiles are already low,” he said. “We thought this was the year we might get some relief from that, and that may not happen. We’re going to have highly volatile prices the rest of the summer.”

Areas of Indiana, Illinois, eastern Iowa and Missouri have had less than half of the normal rainfall in the past 30 days, according to the National Weather Service.