Extreme Drought Puts Even More Heat on Economy
Life + Money

Extreme Drought Puts Even More Heat on Economy


America’s breadbasket is baking to a crisp – and the combination of extreme heat and expansive drought is likely to continue well into early August, further damaging corn and soybean crops that have already been severely compromised – and almost certainly pushing prices up higher.

In the last five weeks, U.S. corn prices have surged more than 55 percent as crops continue to bake in the worst drought in the Midwest in more than 50 years, Reuters reported Friday. The scorching conditions will cause further damage to crops that already have been nearly decimated in some Midwest areas.

On Friday corn and soybeans rose to record highs, extending the biggest gains in two-and-a-half years.

RELATED: Drought! From Fiscal Cliff to Midwest Dustbowl

Though some rain fell over the past few days in about a third of the Midwest, the week ahead "will be dry and very hot (in St. Louis), with temperatures in the 100s (degrees Fahrenheit), reaching 106 on Wednesday," meteorologist Don Keeney told Reuters on Friday. That same hot weather is predicted for the bulk of the central and western Midwest.

On Monday, the government is scheduled to release an updated weekly crop progress report – with many holding their breath.

"We’ve had weeks and weeks of below-normal rainfall and super-high temperatures – high 90s and triple digits – in areas where we never see those temperatures this early in the year," Jeff Caldwell, an editor at Successful Farming in Des Moines, Iowa, told The Fiscal Times on Thursday. "The corn and soybean crops are really hurting. With corn, a lot of areas require a good amount of moisture during the pollination period, and in a number of fields, pollination did occur – but it took place after such dire conditions that a lot of farmers are saying they may have no crop. Many cornfields have stalks with no ears on them at all."

With higher food prices and shipping costs an increasing threat – as well as lower revenues in those areas of the Midwest that rely on all-important summer tourism dollars –The Fiscal Times honed in on some of the key numbers connected with this latest episode of extreme weather:

$8.245 a bushel
Price of corn for September delivery, as of Friday afternoon – up 16.75 cents, the second straight day of record highs

$17.575 a bushel
Price of August soybeans, as of Friday afternoon – up 23.75 cents, the third straight record-setting day

1,300 in 29 states
Number of counties declared federal disaster areas due to the drought, allowing farmers to apply for low-interest loans

55 percent
Percentage of continental U.S. that experienced moderate to extreme drought in the month of June

88 percent
Current percentage of corn crops in drought-stricken regions of the U.S.

87 percent
Current percentage of soybean crops in drought-stricken regions of the U.S.

38 percent
Percentage of nation’s corn crop in poor to very poor condition, as of the week ending July 15 – compared to 30 percent the week before

30 percent
Percentage of soybeans in poor to very poor condition, in same period – compared to 27 percent the week before

54 percent
Percentage of pasture and rangeland in poor or very poor condition, a jump of 4 percent compared to last week – and an all-time high for the 1995-2012 growing season's weekly history

Number of wildfires that have burned in the MarkTwain National Forest in Missouri, as a result of the drought – a record-setting pace

Number of days worth of water that officials in Augusta, Kansas, say is currently available to them via reservoir

Sources: USDA, National Weather Service, Reuters, The New York Times