Tuesday, September 25, 2012 at 8:27 PM
With recent rains soaking northeast Ohio, it’s hard to remember that one of the worst droughts in more than 20 years hit much of the Midwest this summer. Consumers are apt to get a reminder though, when they see some food prices increase in the next few months. Ideastream’s Brian Bull explains.
For Geauga County farmer Jim Timmons, 2012 isn’t a total disaster. As he drives his pickup around his corn fields, he points to one that he expects to produce a reasonably healthy crop.
“This field on our right has got pretty good ear size to it, not completely full as normal but adequate,” says Timmons. “And it has a nice green color…”
But it’s a different story just around the bend.
“Ahead of us you can see the dramatic difference, in that crop is much shorter. Even the ear length is only about a half or third of what would be on the other side of the road here.”
Timmons, whose farm is in Burton, says sporadic and spotty rains may account for the uneven crop results. He says it’s been the same all over the country.
Some estimates put the U.S. corn harvest down 13 percent this year. And prices saw a 50 percent jump this summer. A few crops have recovered with the rains from Hurricane Isaac coming up north. But Timmons says for many farmers, it’s too little, too late.
Just a dozen miles away in the Portage County town of Hiram, Jack Groselle watches his son, Jason, harvest soybeans with a bright red combine. The soybeans are okay, he says. But when we venture into a corn field for a close-up inspection…things don’t look so good.
Groselle pulls an ear from a short stalk. It’s coarsely studded with yellow kernels, and much of it is bare, gray, and scaly.
“Ah, there’s a little...there’s a couple kernels, see? But normally that’d be filled all the way to the top,” he says.
Groselle says he’s not seen a drought this bad since 1988. He’s also had to cope with higher fuel prices, which have driven up the cost of fertilizer.
“We try to buy our fertilizer in bulk now, instead of a little at a time. We’ve got a commodity shed in back and we put the fertilizer in that, trying to save a little money there.”
The effects of the drought on commodities like corn and soybeans are expected to reverberate through the food production industry. Steven Maurer of the Ohio State Division of Farm Services, says shortages of crops used for forage and livestock feed will eventually lead to a price spike for meat.
“Some farmers, because of that lack of forage and high feed prices, are reducing their herds,” says Maurer. “If they want to stay in the beef business, they have to have enough feed. So there’s a lot of herd culling and thinning going on right now, that will lower meat prices in the short term. But once all that initial stock is cleared, meat prices will probably rise because of the drought.”
Expect those price increases for most livestock products early next year, warns John Anderson. He’s an economist for the American Farm Bureau Federation in Washington DC .
“I’m talking about things like milk, eggs, beef, pork, poultry. Somewhere in the ballpark of 5 to 7 percent, probably.”
Even an increase of 5 percent can pinch families and businesses in these tight economic times.
Among the regional companies preparing for a price markup is Gerber’s Poultry, based in Kidron, Ohio. Their chickens are found at Heinens grocery stores and the Chipotle burrito restaurant chain. Co-owner Mike Gerber says there will be an increase:
“Obviously yes, because the diet of the chickens is made up 60 percent of corn, and about 35 percent of soybean meal,” says Gerber. “Our feed costs do make up 55 to 60 percent of our overall costs of operation here. So obviously this is going to have a huge impact.”
Gerber isn’t predicting a specific markup yet for his chickens. He says, they’re trying to control costs in other areas like shipping, limiting deliveries and making sure trucks are fully loaded to offset high fuel prices.
There is sort of a silver lining to the drought, says Roz O’Hearn, spokeswoman for Nestle’s in Solon. Among their products is Libby’s Canned Pumpkin. She says there will be fewer and smaller pumpkins this year….
“….but the quality is very good, because they’re very meaty pumpkins,” she says. “So they’re a great pumpkin to can, but there’s just going to be fewer pumpkins.”
O’Hearn says there could be a price markup, but it’s not been decided yet. She says the last time pumpkins came up short was in 2009, after heavy rains. Tractors spun out in mud, trying to harvest what pumpkins weren’t ruined. Cans of Libby’s Pumpkin were in very short supply - some even appeared on eBay, going for four times the regular price.
And it’s not just pumpkins making the most of the dry spell. Back at his farm in Hiram, Jack Groselle walks through a vineyard he started six years ago. He cradles a fat, purple bunch of grapes destined for a future batch of pinot noir.
“Grapes can stand the dry weather. It’s worked out really well,” says Groselle. This year is the first time we’ve not had to add any sugar to most of the grapes. They are very high in sugar this year, and will make really nice fermentation.”
But Groselle and other growers acknowledge that their corner of Ohio has fared better than many other parts of the U.S., including Illinois, Indiana, and Michigan. Last week, the USDA announced nearly $12 million in drought assistance to 22 states…on top of $16 million announced only a few weeks ago.
Economy, Regional Economy/Business - News, Community/Human Interest, Transportation
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