Agriculture Secretary Tom Vilsack said the severity of the U.S. drought may be peaking, but the impact on corn and soybean crops may not be known until harvest, according to a report from Bloomberg News.
Agriculture Secretary Tom Vilsack said the severity of the U.S. drought may be peaking, but the impact on corn and soybean crops may not be known until harvest, according to a report from Bloomberg News.
Steadying weather conditions may ease pressure to relax federal requirements for the use of corn to make ethanol, he added in an interview at the Iowa State Fair.
“The overall impact of the drought is beginning to decline,” Vilsack said. Uneven dryness from farm to farm make crop predictions difficult this year.
The condition of the nation’s soybean crop improved last week for the first time this year, and corn’s good-to-excellent ratings leveled off at 23%, as rain and cooler temperatures reduced plant stress, the USDA reported.
Moreover, drought conditions are expected to persist in the Corn Belt and the Great Plains through November, the National Oceanic and Atmospheric Administration said in a report yesterday. Lower temperatures and rain expected in parts of the Corn Belt won’t be sufficient to break the drought that has caused grain prices to soar for months, said Joel Widenor, co-founder of Commodity Weather Group, LLC in Bethesda, MD.
Vilsack said as USDA assesses the size and condition of this year’s harvest, it is also starting work on the drought’s impact on the farm economy. His department is starting to look at the potential consequences for next year’s crops in terms of credit availability and planning.
Jose Graziano da Silva, director-general of the United Nation’s Food and Agriculture Organization, has called for a suspension of the U.S. ethanol mandate to free up more corn for food and livestock feed. White House Press Secretary Jay Carney indicated that the USDA and the Environmental Protection Agency are contemplating what action to take regarding requests for waivers from state governors and more than 175 members of Congress.
For his part, Vilsack said he fears that waiving the ethanol mandate may bring long-term harm to investment in biofuel production without producing much relief for food prices.
The purchase of as much as $100 million of pork, $50 million of chicken, and $10 million each of lamb and catfish come on top of $30 million in assistance announced last week. Farmers and ranchers are struggling with the worst combination of heat and dryness since the 1950s, the administration said.
Obama said he also directed the Defense Department to speed up purchases and hold the meat for later use. The buying will help farmers, and the government will get a better price on products than if they were bought later, he said.
“We’ll freeze it for later — but we’ve got a lot of freezers,” Obama told supporters in Council Bluffs as he kicked off a three-day visit to Iowa, a swing state that is also the country’s leading producer of pork, soybeans, corn and ethanol. “That will help ranchers, you know, who are going through tough times right now.”
More than half the counties in the U.S. have been declared natural disaster areas by the Department of Agriculture, and 69 percent of the Midwest last week had moderate to exceptional drought, government data show. The price of corn, the main ingredient in livestock feed, has surged 57 percent since mid- June, reaching an all-time high of $8.49 a bushel on Aug. 10 on the Chicago Board of Trade.
Cattle prices are falling as producers slaughter more animals to avoid the higher feed costs, Cody Jensen, 32, who has a 120 head cow-calf operation in Plainfield, Iowa, said in a telephone interview. Jensen said he’s slaughtering a few more cattle than normal to avoid the rising feed costs.
As producers are “putting more and more live animals to kill, that is putting more meat on the table, which is driving the price down,” Jensen said in a telephone interview.
Livestock producers may be at greater economic risk from the drought than growers of grains and oilseeds because they receive less federal support, said Bill Lapp, a former chief economist for ConAgra Foods Inc. For cattle, the drought may further thin a national herd that at the start of the year was the smallest since 1952, as meatpackers including Tyson Foods Inc. and Cargill Inc. boost short-term slaughter, he said.
Later, as he visited a farm in Missouri Valley, Iowa, Obama called for Congress to pass a five-year agriculture policy bill that the White House said would “provide short-term relief and long-term certainty” to farmers and ranchers.
“The best way to help these states is for Congress to act,” Obama said.
A livestock-assistance program in the current farm bill expired last year. The U.S. Senate and the House Agriculture Committee have approved bills to replace the current law which contain livestock relief provisions. House Republican leaders have not set a vote on their legislation. The House on Aug. 2 approved a $383 million stopgap measure to reinstate the livestock aid, while the Senate took no action. The current farm bill was passed in 2008 and expires in September.
The pork purchase will be a “small shot in the arm to help us through a real trying situation here,” said Bill Tentinger, 63, who markets about 10,000 hogs a year from his farm near Le Mars in northwest Iowa.
“With a purchase like that, I can’t help but think it’s going to help us through somewhat,” said Tentinger, who said he’s been considering liquidating his herd because of high feed costs.
In a statement, R.C. Hunt, the president of the National Pork Producers Council, echoed Tentinger’s remarks, adding that the group “will continue to work with the USDA to help pork producers through this current crisis.”
I wish to inform all my brothers & sisters of an upcoming disaster, because very few know or want to know, that a blood bath of epic proportions is fast approaching for every livestock producer in the United States. I know many will say, “So what! What has that to do with me?” It has everything to do with anyone who eats beef, chicken, pork, goat, lamb, eggs, ANY KIND OF MEAT or drinks milk, it will affect you, your family, our country, the world.
Because of the two years of drought that many parts of our country has experienced, and the worst drought in 56 years our Country has experienced this past summer, farmers, ranchers, dairy men have been culling their livestock back which in itself will cause food prices to soar.
Droughts often mean higher prices for prime meat a season or more down the road, when smaller herds means fewer calves.
But what is going to put many livestock producers out of business completely is the perfect storm that has developed to cause the highest feed costs this country, and for that matter the world, has ever seen. The perfect storm is not only drought in this country and the Mississippi River drying up where most of the bulk grain is shipped world wide, but also the floods in other parts of the world that has destroyed vast amounts of crops. All the while the world population keeps increasing, with little stored back to feed people and livestock in bad times.
I just called my feed supplier today that my wife and I have used for years to feed our herd of meat goats we raise to ship to San Angelo, Texas to the big livestock auction barn. Last winter livestock producers were scrambling to find feed for $300 a ton. Theton price I was just quoted, and I want to remind you it is still summer, the ton price depending on what supplier I want for my breeders cubes, some call it cake, ranges from a low of $506 a ton to a high of $526 a ton!!! Winter is always the time of high prices. What I am trying to relay to you is many livestock producers will not be able to operate with this huge price increases for feed. And the ones who do survive will have to pass the cost along to the consumer or they cannot stay in business!
UPDATE FOR OCTOBER 5, 2012
I went and bought our latest ton of feed for our herd of goats and it came out to $573 a ton. Now I know the large operations in this area buy it by the truck load and not just a ton price like we do, and I am hearing that the truckload price, 12 tons and up is still in the upper $400 dollar a ton range. But you have to understand how historically high this is from normal at this time of year. These huge price increases for feed for livestock must be passed on to the consumer or the livestock producers will be out of business.
Bottom line expect huge price increases in the supermarkets this winter for any kind of meat, eggs, milk, bread, cereal ect. Take this warning seriously from someone who may not be a huge commercial operation, but is a small family rancher, that a blood bath comes our way for the producer and the consumer. May God have mercy on our country and its people. Amen
If a major economic crisis hit us right now, the vast majority of Americans would be extremely vulnerable. According to a recent CareerBuilder survey, 40 percentof all Americans live paycheck to paycheck all of the time, and 77 percent of all Americans live paycheck to paycheck at least part of the time. This is why there was such a problem with foreclosures during the last recession. When millions of Americans suddenly lost their jobs many of them quickly found that they were unable to pay their mortgages because they had no financial cushions. For decades, Americans have been trained that it is okay to get into debt up to their eyeballs and live paycheck to paycheck because times will always be good and jobs will always be easy to get. Unfortunately, times have changed and many Americans do not realize that what has worked in the past is not going to work any longer. Our economy is completely and totally falling apart, and economic success is no longer defined by whoever is able to accumulate the most toys. In this economic environment you could lose your job at literally any moment. Anyone that does not have a sizable emergency fund is flirting with disaster.
So how did we get here?
Why are 77 percent of all Americans living paycheck to paycheck at least part of the time?
Not Enough Jobs
Well, the truth is that the U.S. economy simply does not produce enough jobs anymore.
Everyone that wants a job is not going to be able to have one.
Many were hoping that once the last recession ended that we would see a huge rebound in the employment numbers but that has not happened.
There are lots of reasons why this is happening. One of them, of course, is thatmillions of jobs are being shipped out of the country. When you consider how fast our jobs are being outsourced, it is actually a miracle that things in this country are not even worse.
When you total up all working age Americans that do not have a job in America today, it comes to more than 100 million. Yes, many of them are parents that want to stay home with the kids or students that are enrolled in college, but still that is an absolutely staggering number.
And even the official unemployment numbers are starting to look quite gloomy again.
And if you do lose your job in this economic environment, it may be a long time before you are able to get another. Today, the average duration of unemployment in the United States is nearly three times as long as it was back in the year 2000.
The Quality Of Our Jobs Is Declining
Not only is our economy not producing enough jobs for all of us, the quality of the jobs that are being produced continues to steadily decline.
That is a shocking figure.
The number of low paying jobs continues to increase, fewer jobs are offering health insurance and other benefits, and very few private sector jobs offer retirement benefits at this point.
In America today, one out of every four workers makes ten dollars an hour or less.
But you can’t support a family on 10 dollars an hour.
You can’t even come close.
Sadly, these low paying jobs continue to become a larger part of our economy.
30 years ago, less than 30% of all jobs in the United States were low income jobs.
Today, more than 40% of all jobs in the United States are low income jobs.
That is the wrong direction.
And those just entering the workforce are being hurt the worst.
As the quality of the jobs goes down, so does the wealth of average American families.
Back in 2007, 19.2 percent of all American families had a net worth of zero or less than zero.
By 2010, that figure had risen to 32.5 percent.
And when you look at median net worth, it also tells a story of declining wealth for American families.
According to the Federal Reserve, the median net worth of American families dropped “from $126,400 in 2007 to $77,300 in 2010“.
Needless to say, the middle class in America is being shredded.
Millions are dropping out of the middle class every single year.
So what is happening to them?
Well, they are joining the ranks of the poor and are becoming dependent on the government.
If you can believe it, right now more than 100 million Americans are enrolled in at least one welfare program run by the federal government.
Yes, that is actually true.
Remember, more than 46 million Americans are enrolled in the food stamp program right now and more than 54 million Americans are enrolled in Medicaid.
And those are just 2 of the almost 80 different “means-tested welfare programs” that the federal government runs.
An Increasingly Angry Population
It turns out that most Americans don’t like to be poor.
In fact, most Americans are desperately wanting things to go back to the way they used to be in this country.
The American people are steaming mad right now, and a whole host of recent polls and surveys have shown this.
For example, at this point Congress only has a 10 percent approval rating. That matches an all-time low set earlier this year.
That is a crazy number.
And most Americans expect the economy to continue to decline. According to a recent Gallup survey, 61 percent of all Americans believe that the U.S. economy is getting even worse.
But what can the U.S. government do?
It is already spending more than a trillion dollars more than it brings in.
We are stealing billions of dollars from our children and our grandchildren every single day and yet that is still not enough to get our economy going again.
We desperately need to change course, but neither major political party has any intention of doing that.
So we are headed for disaster.
The following is what renowned investor Jim Rogers had to say during a recent interview….
As far as I’m concerned, the election is irrelevant. One [candidate] happens to be from Boston and one from Chicago, and whoever wins, their friends are going to do well, but other than that America is not going to do well. There’s very little difference in any of these guys. None of them understands the problem. These are the guys that got us into trouble. You expect them to get us out?
And he is right.
We are living in the greatest debt bubble in the history of the world and we are suffering from a complete and total lack of leadership at the top.
Recently, a team of top economists and analysts carefully studied the global economic system, and what this team of experts discovered is quite chilling….
And according to these experts – who have presented their findings to the United Nations, the UK Parliament and a long list of world governments – the catastrophe may happen well before Americans hit the polls in November.
“What this pattern represents is a dangerous countdown clock that’s quickly approaching zero,” said Keith Fitz-Gerald, the Chief Investment Strategist for the Money Map Press, who predicted the 2008 oil shock, the credit default swap crisis that helped bring about the recession, and the Greek and European fiscal catastrophe that is still wreaking havoc until this day.
“The resulting chaos is going to crush Americans.”
Other members of the team were extremely alarmed by what was discovered as well….
Another member of this team, Chris Martenson, a global economic trend forecaster, former VP of a Fortune 300, and an internationally recognized expert on the dangers of exponential growth in the economy, explained their findings further:
“We found an identical pattern in our debt, total credit market, and money supply that guarantees they’re going to fail,” Martenson said. “This pattern is nearly the same as in any pyramid scheme, one that escalates exponentially fast before it collapses. Governments around the globe are chiefly responsible.”
“And what’s really disturbing about these findings is that the pattern isn’t limited to our economy. We found the same catastrophic pattern in our energy, food, and water systems as well.”
Most Americans do not realize this, but we are heading for an economic disaster of unprecedented proportions.
It is going to be extremely painful and it is going to shake millions of Americans to the core.
Get ready while you still can, because time is running out.
What is the biggest economic problem that the United States is facing? Very simply, our biggest problem is that we have way too much debt. Over the past 30 years, household debt, corporate debt and government debt have all grown much faster than our GDP has. But no nation on earth has ever been able to expand debt much faster than national output indefinitely.
All debt bubbles eventually burst. Right now, we are living in the greatest debt bubble in the history of the world. All of this debt has fueled a “false prosperity” which has enabled many Americans to live like kings and queens. But no nation (or household) can pile on more debt forever. At some point the weight of the debt becomes just too great.
It is amazing that the United States has been able to pile up as much debt as it has. Over the years, many authors have predicted that U.S. government finances would collapse long before the U.S. national debt ever got to this level. So the mountain of debt that we have accumulated is quite an “achievement” if you want to look at it that way.
But the clock is ticking on this debt bubble and when it collapses we will say “bye bye” to our vastly inflated standard of living and we will discover that we have destroyed the economy for all future generations of Americans.
Sometimes a picture is worth a thousand words. When most Americans think of the “debt problem” in this country, they think of the debt of the federal government.
But that is not the only debt bubble that we are facing.
Thirty years ago, household debt in the United States was approaching the 2 trillion dollar mark. Today, it is sitting at about 13 trillion dollars….
We have been trained to pay for everything with debt.
We pay for our homes with debt, and mortgage debt as a percentage of GDP has more than tripled since 1955.
We pay for our cars with debt, and at this point about 70 percent of all auto purchases in the United States involve an auto loan.
We pay for higher education with debt, and the total amount of student loan debt in America recently surpassed the one trillion dollar mark.
Wherever we go we pay with plastic.
If you want a heated cat bed and a cute little cat sweater for your little kitty just put it on your Visa or Mastercard.
Amazingly, consumer debt in America has risen by a whopping 1700% since 1971, and if you can believe it, 46% of all Americans carry a credit card balance from month to month.
We are absolutely addicted to debt and we do not know how to stop.
State And Local Government Debt
Our state and local governments are also addicted to debt.
30 years ago, state and local government debt was approaching the 400 million dollar mark. Today, state and local government debt is hovering around the 3 trillion dollar mark….
In the United States today, we don’t just have one “government debt problem” – the truth is that we have hundreds of them. All over the country, state and local governments are facing bankruptcy because of too much debt.
For example, according to Fox News the city of Stockton, California is right on the verge of declaring bankruptcy. In fact, an announcement could come as early as this week.
Stockton, Calif., is set to declare bankruptcy as early as this week, according to local officials, a move that would make it one of the largest U.S. cities ever to file for reorganization.
On Monday, a state-required mediation with creditors to find a fiscal solution is scheduled to expire. Stockton’s City Council is then slated to meet Tuesday to decide whether to adopt a budget for operating in bankruptcy, a move widely considered the last step before the city formally submits a Chapter 9 petition to federal bankruptcy court.
Federal Government Debt
Of course the biggest offender of all is the federal government. 30 years ago, Ronald Reagan was running around proclaiming what a nightmare it was that the U.S. national debt was reaching the one trillion dollar mark.
Well, now we are about to blast through the 16 trillion dollar mark with no end in sight….
Running up debt at a much faster rate than our GDP is rising is a recipe for national financial suicide. Our politicians continue to steal about 150 million dollars an hour from future generations and everybody just acts like this is perfectly normal.
We are going down the same path that Greece, Portugal, Italy, Ireland and Spain have gone.
In fact, we already have more government debt per capita than all of those nations do.
Both political parties have been doing this to us, and it just keeps getting worse and worse.
Incredibly, the national debt has grown more under Obama in less than 4 years than it did under George W. Bush during his entire 8 year term.
Since Barack Obama entered the White House, we have accumulated more than five trillion dollars of additional debt.
We are on the road to national financial oblivion, and most Americans don’t seem to care.
Debt From Sea To Shining Sea
Now let’s add up all the debt in the country. When you total up all household debt, business debt and government debt, it comes to more than 300% of our GDP….
In fact, if current trends continue we will hit 400% of GDP before too long.
As you can see from the chart, there was a little “hiccup” during the last recession, but now the debt bubble is growing again.
So how high can it go before the entire system collapses?
Total credit market debt owed is roughly 10 times larger than it was about 30 years ago.
How in the world did we accumulate 10 times more debt in just 30 years?
If we do that again in the next 30 years, our total debt will be more than 500 trillion dollars in the 2040s.
Unfortunately, that is the way that debt spirals work. They either have to keep expanding or they collapse.
So will the U.S. debt spiral continue to expand?
Or will we soon see a collapse?
Sadly, this exact same thing is happening all over the world. The government debt to GDP ratio in Japan (the third largest economy in the world) blew past the 200% mark quite a while ago, and almost every country in the EU is absolutely drowning in debt.
The world has never faced anything quite like this. There is way, way too much debt in the world, but the only way we can continue to enjoy this level of prosperity under the current system is to pile up a lot more debt.
The western world is like a debt addict in a deep state of denial. Some debt addicts end up with dozens of credit card accounts. They will keep opening more accounts as long as someone will let them. Most debt addicts actually believe that they will be able to get out of the hole at some point, but most never do.
Most Americans still believe that we are experiencing “temporary” economic problems that will eventually go away. Most Americans still believe that even greater prosperity is still ahead.
Sadly, what the mainstream media and the two major political parties are telling them is a bunch of lies.
We have enjoyed the greatest prosperity that we will ever see in the United States, and when the debt bubble bursts there is going to be an immense amount of pain.
That is a very painful truth, but it is better to come to grips with it now than be blindsided by it later.