published Monday, August 1st, 2011

Drought takes its toll

Most area residents have been spared, so far, the worst of the historic drought that currently affects parts of the nation, but that does not mean they can avoid the long-term effects of the lack of rainfall. Their pocketbooks will feel the impact.

It's not a question of if consumers will pay more for food and related products in coming months, but rather one of how much prices will rise. There is general agreement among agricultural economists that increases should be expected.

Mounting evidence supports that belief. The nation's early wheat harvest has been well below normal. Projected yields from the nation's corn, bean, grain and cotton crops are expected to be lower on average than normal, too. Stockpiles of those commodities are unlikely to ease possible shortages or ameliorate predicted price increases. Officials say that the carryover from earlier harvests is extremely small.

Drought-related shortages are not limited to major crops. In South Georgia, for example, the seasonal and much anticipated supply of produce -- tomatoes, corn, peppers, cucumbers, melons etc. -- has been reduced by the lack of rainfall. Consequently, while consumers here might not be paying much more this year than last for fresh-picked fruits and vegetables at community markets and roadside stands, shoppers in other others are doing so.

The real impact of the drought on household budgets will come as harvest shortfalls and shortages work their way through the supply chain. Shortages in wheat, for instance, could drive up the price of bread and other baked goods. Shortages of cotton likely will increase the cost of clothing. There's little hope for help from other producers. Drought in Europe and Asia plus increasing worldwide demand for commodities has tightened the market and continues to push prices upward.

The most noticeable impact for consumers likely will come at the meat market. Ranchers and hog and chicken producers have been hit hardest by the drought. In Texas, for example, livestock economists say cattle herds are being depleted at an increasing rate. Ranchers have little choice other than to sell off.

Grass has become scarce during the drought and supplemental feeds like hay are in short supply and expensive. The same combination of heat and rising feed prices hits hog and chicken farmers, too. It's forced many to market animals now rather than run the risk of reduced profits caused by rising expenses.

The resultant increase in the meat, poultry and egg supply chain might ease prices now, but the benefit will be short-lived. In the long term, prices likely will rise as drought-inspired shortages of livestock and tight supplies of basic commodities like wheat and corn negatively impact the nation's and the globe's food chain.

There's no way to know when the current drought cycle will end. The only thing certain is that it will require the return of more normal weather patterns. Until that occurs, ranchers, farmers and consumers can do little other than carefully manage their resources and ramp up efforts to conserve water in both good times and bad.

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