The ongoing drought in the Midwest, in addition to worrying farmers and hurting their bottom line, will likely raise food prices, adding one more major pressure to consumers already struggling in a tough economy.
Earlier this year, farmers across the country planned to harvest the largest corn crop in more than 80 years. With corn prices at all time highs thanks to increased ethanol production, the harvest could have filled farmers’ coffers, giving them an influx of cash that could be used to modernize equipment, pay off loans, and expand production. Ironically, the massive corn crop was expected to lower prices dramatically, largely thanks to the sudden expansion of the corn supply.
With much of the Corn Belt in the grip of an increasingly severe drought, however, this plan is unlikely to reach fruition. States like Indiana, the nation’s fifth-largest corn and soybean producer, are experiencing the hottest, driest June in recent history. The lack of rain, combined with the last year’s dry winter, is stressing crops and leaving fields barren.
The damage being done to corn and soybean crops will likely have a severe ripple effect on food prices. The U.S. Department of Agriculture is already predicting that food prices will likely increase by about 3.5 percent by 2013.
To learn more about agricultural financing opportunities contact a Farm Plus Financial representative by calling 866-929-5585 or by visiting www.farmloans.com.
Follow us on: Twitter
Written by: Justin Ellison / Farm Plus Staff Writer