|Future Drought Effects?|
|Friday, 22 February 2013 11:33|
It's tough to think of this with the snow we've received, but officials say Iowa still needs to be concerned about drought. The head of Iowa State Extension calls the current drought "a super slow-motion disaster".
Cathann Kress says consumers, farmers, ag-related businesses, small towns, and others could feel effects of the drought for years if dry conditions persist.
Normally, Iowa receives about 12 inches of moisture between October and April. However current weather models and experts say the state is well below that mark. The drought that started in 2011 is now beginning to show some affect on consumers in 2013.
"It's a function of supply and demand.", say ISU Extension Field Specialist Bob Wells. "We have a limited supply of corn and we have a growing demand every year through exports, ethanol production, or livestock feed."
So what that means is if we see a Reduction in corn crops we'll see and Increase in the prices of ever kernel.
"Now we are making some adjustments. The cowherd is down considerably. So the demand for livestock feed is down somewhat. The demand for ethanol is down a little bit. And in the world market the strength of the dollar has affected us there so exports are down. So there is a combination of things that are working.", Wells added.
In the first half of 2013 most animal-based food costs could multiply because of the higher feed prices. According to the USDA and Consumer Price Index food cost could possibly increase by 3 to 4 percent over the next several months because of that. This forecast represents an annual increase that is above the historical average.
"We'll see some increase such as in milk. We'll see increases in beef prices, pork prices, as well as possibly poultry. But some times that's more of the supply that we have of that then it was the cost of getting it to the grocer's case.", says Wells.
Economists' caution against attempting to project economic impacts while a drought is in progress, ISU extension and outreach vice president Cathann Kress said, "it's only possible to infer the kinds of economic damages to expect but not the magnitude of those losses.
Lawmakers say the farm sector has helped Iowa have a strong economy and the drought's potential financial impacts may not be known for another year depending on moisture and temperatures in the coming months.