Extreme drought hits most of US prompting 1000 counties to be names disaster areas , corn / soy and wheat prices to move higher , ranchers selling hers as feed spikes -- expect food costs to jump as the year rolls on !

http://www.zerohedge.com/news/us-climate-update-warmest-12-months-record

US Climate Update: Warmest 12 Months On Record

Submitted by Tyler Durden on 07/16/2012 20:30 -0400

• NOAA
 
• South Carolina

The Northern Hemisphere just experienced the all-time warmest June on record, at 2.34°F above average. The average temperature for the contiguous U.S. during June was 71.2°F, which is 2.0°F above the 20th century average, contributing to arecord-warm first half of the year and the warmest 12-month period the nation has experienced since record-keeping began in 1895. Scorching temperatures during the second half of the month led many cities to set all-time temperature records. The nation, as a whole, experienced its tenth driest June on record.Record and near-record dry conditions were present across the Intermountain West. Over 170 all-time warm temperature records were broken or tied during the month. Temperatures in South Carolina (113°F) and Georgia (112°F) are currently under review by the U.S. State Climate Extremes Committee as possible all-time statewide temperature records. According to the U.S. Drought Monitor, as of July 3, 56.0 percent of the contiguous U.S. experienced drought conditions, the most since records began.

Globally, the US is anomalous...

but it is the entire Northern Hemisphere that is bathing in the heat...

As rain (or lack thereof) remains a massive problem...

With some of the craziest anomalies ever in the US...

http://www.businessinsider.com/july-15-corn-surging-2012-7

This is the hottest bull market in the world: CORN!

Thanks to the drought and the heat, corn prices are going through the roof, and in the opening of trading on this Sunday evening, prices per bushel are surging once again.

Here's a look at September Corn futures via the CME:

CME

Stepping back, you can see the big surge since mid-June.

CME

Most markets are quiet so far to start the week, but with drought and heat conditions in the farmbelt the worst in over 20 years, this is becoming a huge story.

http://lubbockonline.com/agriculture/2012-07-15/usda-reports-corn-18-states-hurt-drought

USDA reports corn in 18 states hurt by drought

Posted: July 15, 2012 - 12:13am

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Seth Perlman

Steve Niedbalski shows his drought- and heat-stricken corn while chopping it down for feed Wednesday in Nashville, Ill. Farmers in parts of the Midwest, dealing with the worst drought in nearly 25 years, have given up hope for a corn crop and are mowing over their fields and baling the heat-withered plants for livestock feed.

By AP

DES MOINES, Iowa — For months, Illinois farmer David Kellerman held out hope for rain, even as the worst drought in nearly 25 years spread across the country.

He finally gave up when the temperature hit 108 three days in a row. Corn won’t develop kernels if it gets too warm during pollination, and Kellerman knew the empty cobs in the fields where he works would never fill out. Just after the Fourth of July, he and the neighbor he farms with took an extraordinary step: They cut down the entire crop and baled the withered plants to use as hay for their cattle.

Almost a third of the nation’s corn crop has been damaged by heat and drought, and a number of farmers in the hardest hit areas of the Midwest have cut down their crops just midway through the growing season. The USDA reports 18 states have been hurt by drought. But the nation could still see one of the largest harvests in U.S. history, thanks to new plant varieties developed to produce more corn per acre and better resist drought.

Kellerman said he was surprised his corn fared as well as it did, growing to a decent height even though there had been less than an inch of rain since mid-April. The dirt in the area where he farms near Du Bois, Ill., has the consistency of dust, but it wasn’t until the extreme heat “fried” the plants, that he lost hope.

“Genetics are much better,” he said. “Corn five years ago would never have lasted this long.”

Corn production has been improving steadily for decades, the result of scientific advances going back to the introduction of the first commercial hybrid in 1923. Genetic engineering accelerated the process in recent years and allowed the development of some strains that borrow DNA from other species for pest resistance.

Corn farmers expected this to be a record year when they planted, sowing 96.4 million acres, the most since 1937. The U.S. Department of Agriculture predicted they would get 166 bushels per acre.

But after months with little or no rain and extreme heat in large portions of the Corn Belt, the USDA on Wednesday revised that estimate, saying it now expects farmers to average just 146 bushels per acre this year.

That would still be an improvement from a decade ago, when the average was about 129 bushels. Agriculture Secretary Tom Vilsack still expects the nation to produce the third-largest corn crop in American history, even as he announced disaster-relief measures for farmers, like Kellerman, who have lost everything.

“It is important to point out that improved seed technology and improved efficiencies on the farm have made it a little bit easier for some producers to get through a very, very difficult weather stretch,” Vilsack said. “Our hope is rains come to the central part of the United States soon to be able to salvage what can be salvaged.”

The drought stretches from parts of Ohio to California. The historic drought that gripped Texas and other parts of the Southwest last year was more severe, but this year’s dry spell is notable for the sheer size of the affected land.

“To see something on this continental scale, where we’re seeing such a large portion of the country in drought, you have to go back to 1988,” said Brad Rippey, a USDA agricultural meteorologist.

That year, farmers saw corn yields, or the amount produced per acre, drop by nearly a third.

This year’s loss, so far, is expected to be half that — one reason why people like Bill Gates believe better crop technology will be the key to feeding the world as the population grows and climate changes.

Jeff Schussler, a senior research manager for DuPont Pioneer, said the company’s studies show corn hybrids today can produce 50 percent more bushels of corn per inch of water than those of 50 years ago. Working with genes that affect root and leaf development and plant reproduction, scientists also have created much more stable corn plants that can withstand a wider variety of climate conditions, he said.

“All these hybrids that have been produced in the last few years are built for drought tolerance so we have a little more hope that they will be able to withstand some of this heat, more so than they would have say 10 years ago,” said Garry Niemeyer, who grows corn and soybeans in Auburn, Ill., and is president of the National Corn Growers Association.

He said plants have been developed with a larger root mass, which allows them to reach deeper for water and hold more in reserve. Certain varieties also are capable of rolling up their leaves to slow moisture loss.

“There’s a lot of technology that goes into our corn crop,” Niemeyer said.

Still, it’s hard to say how the year will turn out with about half of the growing season to go.

Corn plants today withstand drought better than they did in 1988, but no variety exists that can produce significant yields without rain for six weeks and sustained temperatures above 100 degrees, said Tony Vyn, an agronomy professor at Purdue University.

“You get to the point where the water shortage is so severe that technology is not going to guarantee yield, even when you might have that expectation,” he said. “My experience thus far is that drought-tolerant hybrids are no silver bullet.”

and.....

http://theeconomiccollapseblog.com/archives/the-corn-is-dying-all-over-america

The Corn Is Dying All Over America

All over America the corn is dying.  If drought conditions persist in the middle part of the country, wheat and soybeans will be next.  Weeks of intense heat combined with extraordinarily dry conditions have brought many U.S. corn farmers to the brink of total disaster.  If there is not significant rainfall soon, many farmers will be financially ruined.  This period of time is particularly important for corn because this is when pollination is supposed to happen.  But the unprecedented heat and the extremely dry conditions are playing havoc with that process.  With each passing day things get even worse.  We have seen the price of a bushel of corn soar 41 percent since June 14th.  That is an astounding rise.  You may not eat much corn directly, but it is important to realize that corn or corn syrup is just about in everything these days.  Just look at your food labels.  In the United States today, approximately 75 percent of all processed foods contain corn.  So a huge rise in the price of corn is going to be felt all over the supermarket.  Corn is also widely used to feed livestock, and if this crisis continues we are going to see a significant rise in meat and dairy prices as well.  Food prices in America have already been rising at a steady pace, and so this is definitely not welcome news.

The weather conditions in the middle part of the country during the last couple of months have been highly unusual.  The following is from a recent article in the Los Angeles Times....

It's not that the Midwest hasn't been extremely hot before, and it's not that it hasn't been incredibly dry.

But it's unusual for a vast swath of the Midwest to be so very hot and so very dry for so very long -- particularly this early in the summer.

The current heat wave -- which is spurring comparisons to the catastrophic heat of 1936 --  is "out of whack," meteorologist Jim Keeney said Friday in an interview with the Los Angeles Times.

Corn crops typically pollinate and mature in June and early July.  That is why this time of the year is so vitally important for corn.  We have reached a make it or break it moment.

The following is how an Accuweather.com report described what is happening right now....

Either heat or drought can stress the stalks, but both can basically shut down the pollination process. When this happens few, small or no ears of corn form.

According to AccuWeather.com Agricultural Meteorologists, you can't raise a corn crop with less than an inch of rain over six weeks, combined with 100-degree and higher temperatures. However, these conditions have taken place in much of the southern corn belt through the week of July 4, 2012.

If pollination does not happen, corn farmers might as well give up.

Just check out what agricultural economist Chris Hurt said the other day....

"Pollination problems just can’t be overcome, even if the weather turns. There’s no turning back. There’s just failure."

At this point, half of all corn in the state of Indiana is already in poor shape.

With each passing day, the condition of the corn gets even worse.

As a recent article in the Chicago Tribune detailed, many farmers feel completely helpless at the moment....

Dave Kestel, who farms about 1,300 acres in Manhattan about 40 miles southwest of Chicago, said he feels helpless.

"Every day you get out there and it's the same heat and cloudless sky," he said. "You see your corn just withering out there, knowing you can't do anything about it."

The United States is suffering from a severe lack of rain.  Just look at the chart posted below.  According to the U.S. Drought Monitor, most of the country is experiencing drought conditions right now....

These drought conditions have also played a major role in the huge number of wildfires that we have seen lately.

There are a few northern states that are not feeling the drought right now, but otherwise the rest of the country is extremely dry.

So what does all of this mean for you and I?

A recent article by Holly Deyo summarized why we should all be praying for rain....

Since 75% of grocery store products use corn as a key ingredient, expect food prices to skyrocket. Corn is also a staple in many fast foods. Corn is in ethanol and the main food source or chickens. In addition to this, maize is in many things that aren't obvious like adhesives, aluminum, aspirin, clothing starch, cosmetics, cough syrup, dry cell batteries, envelopes, fiberglass insulation, gelatin capsules, ink, insecticides, paint, penicillin, powders, rugs and carpets, stamps, talcum, toothpaste, wallpaper, and vitamins. That's just for starters...

This is a huge heads up for you to purchase corn-using products NOW before these conditions reflect in grocery goods. It will be a narrow window of opportunity.

These thoughts are being echoed by many agricultural economists as well.  According to Businessweek, the outlook for U.S. food prices is bleak....

"When people look at rising prices for hamburger, butter, eggs and other protein sources from higher corn costs, that’s when more money ends up in the food basket," said Minneapolis- based Michael Swanson, a senior agricultural economist at Wells Fargo & Co., the biggest U.S. farm lender. "We were hoping for a break, and we aren’t going to get it."

Unfortunately, the fact that the corn is dying all over America is not just a problem for the United States.

As Businessweek also recently noted, the fate of U.S. corn affects the entire globe....

When rain doesn’t fall in Iowa, it’s not just Des Moines that starts fretting. Food buyers from Addis Ababa to Beijing all are touched by the fate of the corn crop in the U.S., the world’s breadbasket in an era when crop shortages mean riots.

This year they have reason to be concerned. Stockpiles of corn in the U.S. tumbled 48 percent between March and June, the biggest drop since 1996, the U.S. Department of Agriculture said last week. And that was before drought hit the Midwest.

The United States is the world’s biggest exporter of corn by far, and if there is a massive corn crop failure in America it is going to be felt to the four corners of the earth.

Just check out what Abdolreza Abbassian, a senior economist with the U.N. Food & Agriculture Organization, said the other day....

"Everyone watches the U.S. because they can rely on it. Without it, the world would starve."

Back in February, I wrote an article that suggested that we could see dust bowl conditions return to the middle part of this country in the years ahead.

A lot of people were skeptical of that article.

Not quite as many people are skeptical today.

and..... 

http://globaleconomicanalysis.blogspot.com/2012/07/extreme-drought-hits-much-of-us-1000.html

Saturday, July 14, 2012 1:32 AM

Extreme Drought Hits Much of US; 1000 Counties in 26 States Named Disaster Areas; Ranchers Sell Herds as Feed Costs Skyrocket

Corn, soybean and wheat prices have soared lately due to poor crop estimates amid extreme drought conditions in 26 states.

Let's take a look at those conditions, followed by charts of agricultural commoditiesThe Atlantic Wire reports U.S. Declares the Largest Natural Disaster Area Ever Due to Drought 

 

AP Photo/Seth Perlman

The blistering summer and ongoing drought conditions have the prompted the U.S. Agriculture Department to declare a federal disaster area in more than 1,000 counties covering 26 states. That's almost one-third of all the counties in the United States, making it the largest distaster declaration ever made by the USDA.

The declaration covers almost every state in the southern half of the continental U.S. However, it does not include Iowa, which is the largest grain and corn producer in the U.S.

About 53 percent of the country is facing "moderate to extreme drought" so far this summer.

The New York Times reports Drought Worsens for Farmers and Ranchers.

 

More than 1,000 counties in 26 states across the country were named natural-disaster areas on Thursday in a statement from the U.S. Department of Agriculture. It was the single largest designation in the program’s history and the worst drought since 1988, government officials said.

USDA Announces Disaster Areas

The USDA announces Streamlined Disaster Designation Process with Lower Emergency Loan Rates 

 July 11, 2012—Agriculture Secretary Tom Vilsack today announced a package of program improvements that will deliver faster and more flexible assistance to farmers and ranchers devastated by natural disasters. ....

SECRETARY VILSACK: Thank you, and thanks to all who are on the call. I am joined today by Juan Garcia, FSA, and Brandon Willis, who is from my office, and if there are very detailed questions, I may ask either one of those gentlemen to help me.

We just had a crop report today, which indicated a significant reduction in corn production as well as bean production, lower forecast for wheat, soybean, soybean oil, soybean meal, and corn, lower forecast for milk, beef, pork, broilers, and turkey. And it's obvious that weather is having an impact on the estimates of crops. Despite the fact that we have more acreage planted this year, we still are looking at significant reductions, and despite the fact that we may even with the corn estimates, as they have been reduced, would still have the third largest crop of corn in our history, nearly 13 billion bushels, and a very large soybean crop. We need to be cognizant of the fact that drought and weather conditions have really impacted and affected producers around the country.

USDA Drought "Fast-Track" Map

Please consider the USDA Drought "Fast Track" Map

 

Fast-Track means farmers and ranchers will be able to access “faster and more flexible assistance”. Actual drought conditions are worse than the above map indicates as shown by the following map.

U.S. Drought Monitor



Click here for a very nice 12-week time-lapse drought animation of the above chart.

Alabama Drought

The Gadsen Times reports Drought emergency declared in 33 Alabama counties 

 

Corn wilts in high temperatures in a filed along Upper River Road in Priceville, Ala., Friday, June 29, 2012, as temperatures exceeded 100 degrees. Thirty-three Alabama counties, mostly in the Southern part of the state, are under a severe drought emergency. (Brennen Smith | Decatur Daily | Associated Press)

Eastern Iowa in 'severe drought'
The USDA reports Eastern Iowa in 'severe drought'

 An eastern Iowa triangle from the Quad Cities and Dubuque extending west to Cedar Rapids and near Waterloo has joined Illinois, Indiana and Missouri as places in “severe drought.”

The updated U.S. Drought Monitor map issued Thursday by the U.S. Department of Agriculture, the National Weather Service and the University of Nebraska returned western Iowa to abnormally dry status after a week of virtually no rainfall.

The weather service forecasts what it calls a “slight chance” of thunderstorms for today and Saturday, with temperatures returning to the mid-90s by Monday.

Midwest drought is severe or extreme in most of Missouri, Illinois and Indiana. The western half of Nebraska is now in severe drought and parts of western Kansas are experiencing extreme drought, according to the updated map.

Ranchers Sell Herds as Feed Costs Skyrocket

Reuters reports Ranchers Sell Herds as Feed Costs Skyrocket

 Ranchers are rushing to sell off some of their cattle as the worst drought in nearly 25 years dries up pastures, thins hay supplies and sends feed costs sky-rocketing.

The drought in the Midwest follows another one last year in the southern Plains. The 2011 drought was centered in the heart of cattle country in Texas and helped to shrink the U.S. herd to about 91 million head, the smallest in about 60 years, while sending beef prices to record highs.

A rush by ranchers to sell cattle, and in some cases hogs, could force consumers to dig deeper into their wallets next year as smaller herds can lead to higher beef and pork prices.

There has been a big jump in the number of cows slaughtered in the United States. Cows are critical to growing the beef herd, fewer cows means fewer beef cattle later. In the week ending June 30, 52,700 cows were slaughtered, 3 percent more than a year ago during the peak of the Plains drought, USDA data showed.

Corn

click on any chart for sharper image

Soybeans

Wheat

Going long agricultural commodities in early June was a winner. However, I cannot divine the weather.

The thing that amazes me in all of this is the USDA still expects the third biggest corn harvest ever.

If the drought in Iowa worsens, that is not going to happen.