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Entries in drought (16)

Saturday
Jun012013

Beef Prices Rising as Farmers Deal with Demand, Drought

Ciaran Griffin/Thinkstock(NEW YORK) -- It’s that time of year when Americans start firing up the grill, but the sound of sizzling beef burgers seems to be fizzling, thanks to a rise in the cost of beef.

A ground beef burger now costs $3.26 per pound, up from $2.99 a year ago, according to the U.S. Department of Agriculture. And a sirloin steak now costs $6.86 per pound, up 7 percent from last summer.

“I’m buying less beef because prices … seem to be going up,” Meltin Escoboza told ABC News today.

Experts say the growing demand for U.S. beef from around the globe, including China, as well as a drought in the Southwest, are pushing up the price of beef.

Last year’s drought — the worst in U.S. history — dried up grazing grasses and sent the costs of corn and soybeans, both used in cattle feed, soaring. The current drought in the Southwest continues to wipe out the feed and makes it very expensive to raise cattle.

In response, ranchers slashed the size of their herds. The U.S. now has the smallest number of cattle since 1952.

Wally Weaver, a chef at the 3 Forty Grill in Hoboken, N.J., advised families to go for smaller portion sizes, rather than a lower quality beef, as well as bigger sides — a restaurant trick.

“That way you save a little money and you still get what you want to eat,” Weaver said. “We have awesome sides that we serve with the steaks and the other dishes. You don’t really notice.”

He also suggested using a portobello mushroom rather than meat because they are meaty and can be added as a side or stand in for a burger. Weaver said that if cheaper cuts such as flank and skirt steaks are used, they should be marinated for 24 hours in a vinegar-based liquid.

Lynn R. Russo-Talbot of Washington state said that turkey would be the new T-bone steak of the summer for her family.

And Kathy Robertson of Martinsville, Va., said that she mixed black beans and bread crumbs with her ground beef to stretch it longer.

Agriculture traders told ABC News Saturday that higher beef prices would remain high because, as ranchers increased the size of their herds, demand continues to grow, canceling out the extra supply.

Copyright 2013 ABC News Radio

Wednesday
Aug292012

Beef Prices Expected to Rise This Year as Farmers Deal with Drought

DC Productions/Thinkstock(NEW YORK) -- Despite the torrential rainfall in the South with Hurricane Isaac, severe drought is affecting the Midwest, which is expected to make the already rising price of beef go higher.

Many farmers are selling their cattle to save their profits because they don't have the grass and water to feed them.

Missouri, which has 106,500 ranches -- the second largest number of any state, behind Texas -- is seeing noticeably smaller herds, the St. Louis Post-Dispatch reported.

Last week, there were 30,571 cattle sold in the state, compared to 22,387 for the same week in 2011, according to data tracked by Missouri's Department of Agriculture.

"There's hardship out here for some of these guys due to drought and higher feed cost," said Bill Lapp, president of Advanced Economics Solutions, an economic research firm focused on the food industry.  "Consumers will feel pain too."

The U.S. Department of Agriculture (USDA) projects that prices for cattle, or steer, for the fourth quarter will be $1.15 to $1.23 per pound, up from the 2011 annual average of about $1.14, which Lapp said is closely correlated to consumer beef prices.

The cattle industry and beef prices have been negatively affected since 2007 by cycles in the industry and an increase in exports, he said.

Lapp said the beef industry always sees an ebb and flow in herd sizes and commensurate increases or decreases in beef production, directed by the industry's profits.

Spikes in the price of corn, which is feed for cattle, in 2008 and 2011, and then one of worst droughts in Texas and Oklahoma last year exacerbated the situation.

As supplies decrease, prices will likely increase further in 2013, consistent with the USDA's forecasts.

"Without regard to the high price of corn and drought, this has more or less been etched in stone," said Lapp, who is based in Omaha, Neb.

Copyright 2012 ABC News Radio

Monday
Aug132012

Obama Highlights Federal Response to Drought in Iowa

JIM WATSON/AFP/Getty Images(BOONE, Iowa) -- Touring drought-stricken Iowa, President Obama Monday showcased the power of incumbency as he touted his administration’s response to the drought and announced new federal aid to help farmers and ranchers.

The federal government is buying up to $170 million worth of meat, poultry and farm-raised fish, the Obama administration announced Monday. “Because of the drought, there are a lot of folks out there that are trying to sell meat right now,” Obama later told reporters while visiting the parched McIntosh family farm in Missouri Valley.

“So, just like you might buy more chicken when it’s on sale and freeze it, we are going to stock up. Prices are low; farmers and ranchers need help; so it makes sense.”

After accusing Mitt Romney’s running mate, Paul Ryan, earlier Monday of blocking aid to farmers, the president reiterated that, "the best way to help these states is for Congress to act."

“They need to pass a farm bill that not only helps farmers and ranchers respond to natural disasters, but also makes necessary reforms and gives them some long-term certainty. But the folks suffering from this drought can’t wait for Congress to do its job. So in the meantime, I’ve made sure that my administration … is doing everything we can to provide relief to those who need it,” he said.

"This won’t solve the problem. We can’t make it rain," he said of the new aid. "But this will help families like the McIntoshes in states across the country, including here in Iowa. And we’re going to keep doing what we can to help because that’s what we do. We are Americans. We take care of each other. And when our neighbors hit a rough patch, we step up and help out."

Copyright 2012 ABC News Radio

Friday
Aug102012

Drought Taking Toll on Corn, Soybean Farmers

iStockphoto/Thinkstock(OMAHA, Neb.) -- It’s been 56 years since the U.S. last experienced a drought as bad as the one this year. And according to an Agriculture Department report released today, the drought has drastically reduced production estimates for corn and soybean.

Corn production is down 13 percent from 2011. Based on conditions as of August 1, yields are expected to average 123.4 bushels per acre, down 23.8 bushels from 2011. If realized, this will be the lowest average yield since 1995.

“Corn is important,” said Bill Lapp, president of Advanced Economic Solutions, a commodity and economics consultancy in Omaha. “In a normal year, corn is more than half of all the corps we produce in the U.S.  So when we have a bad corn crops it affects virtually all food products that the average American consumes.

“When corn sneezes, other commodities catch a cold.”

So what does this mean for the consumer? In the short term, not much, said Erin Lash, a senior equity analyst with Morningstar, in Chicago. Lash doesn’t think the high prices will trickle down to the grocery store, at least not over the next few weeks and months.

“Consumer product firms tend to hedge their costs or make commitments to buy at a particular cost for several months in advance,” said Lash. “As a result, the higher commodity prices that we’re seeing now–and that could persist in light of the challenging weather conditions that we’ve had this summer in the U.S. cornbelt– in general won’t impact these firms for a few quarters.”

Longer term, the outlook is more bleak. According to Lapp, over the next year, the price of vegetable oil will most likely increase. So will the price of wheat, rice, oat and barley.

“By having higher prices for the major agriculture commodities, we have imposed a $30 billion dollar tax on the US consumer,” he said.  “Spread out, that will add about 4 and a half percent to the average American consumer food bill.”

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Copyright 2012 ABC News Radio

Tuesday
Aug072012

Obama Authorizes $30 Million More in Drought Aid  

iStockphoto/Thinkstock(WASHINGTON) -- The Obama administration is authorizing an additional $30 million to help farmers and ranchers in areas hit by the severe drought.

“This has been an all-hands-on-deck response…But obviously, we’ve got a lot more to do because a lot of folks are being affected by this,” President Obama told reporters at a White House meeting on the drought response.

Obama announced a series of steps to aid families and businesses impacted by the worst drought in 25 years, including increasing lending to small businesses and a Department of Transportation initiative to help commercial truck drivers provide much-needed supplies to the affected areas.

“We’re going to continue to solicit ideas from state and local organizations, state-based organizations, not-for-profit groups, the private sector, and most of all, the farmers and ranchers that are directly impacted, to find additional ways that we can help because when there’s a disaster like this, everybody needs to pull together,” he said.

The president called on Congress to pass the farm bill to “not only provide important disaster relief tools, but also make necessary reforms and give farmers the certainty that they deserve.”

“My hope is that Congress, many of whom will be traveling back to their districts, in some cases in rural communities, and see what’s taking place there, will feel a greater sense of urgency and be prepared to get this done immediately upon their return,” he said.

Copyright 2012 ABC News Radio

Monday
Jul302012

Ethanol Waiver Sought Amid Drought

iStockphoto/Thinkstock(WASHINGTON) -- Groups representing the livestock and poultry industry are petitioning the Obama administration to waive requirements for gasoline refineries to blend ethanol into their fuel production for one year.

The groups have asked the Environmental Protection Agency to suspend the practice in order to curb the rising cost of grain as extreme drought conditions spike feed costs for Midwestern farmers. In a conference call with reporters, industry representatives said the price of meat will continue to rise for consumers unless the waiver is granted.

“We're worried about having enough corn, soybeans, and other crops at any price to feed our animals,” said Tom Super of the National Chicken Producers Council. “These aren't unfounded fears.”

Citing USDA statistics, Super says a poor corn yield this year could result in an increase to food prices of 4 percent for consumers. The drought has forced the price of turkey alone up 50 percent.

John Burkel of the National Turkey Federation suggested the holiday season could see a disproportionate effect.

“You will see a drop in production across all the meats and prices that just put the consumer in a position where they can't afford to buy meat anymore, or very little of it,” he said, adding, “At Thanksgiving they'll splurge, but they're not going to put the extra bird in the freezer.”

The petition comes little over a week since poultry groups lost a challenge to the mandate in federal court, the latest in the spat between some farming organizations and the ethanol industry. Opponents of the biofuel contend the federal mandate for its inclusion in gasoline is a form of non-competitive subsidy.

But not all agricultural groups are on board. On Friday the National Farmers’ Union, which represents both ranchers and produce growers, questioned the practicality of eliminating the mandate.

“NFU stands by the belief that concerns from the livestock sector and some members of Congress are unwarranted,” it said in a written statement, adding “eliminating the [Renewable Fuel Standard] would reduce corn prices less than five percent.”

The stat is referencing a study released by Iowa State University on the impact of the drought. On the call a meat industry spokesman said that seemingly small figure translated into roughly $1 billion in revenue for meat distributors.

Bob Dineen of the Renewable Fuels Association says while they understand the farmers’ plight, the only beneficiary to an ethanol suspension would be oil companies.

“Waiving the RFS won’t bring the type of relief the livestock groups are seeking, nor will it result in significantly lower feed prices,” Dineen maintains, “In fact, because ethanol plants also produce a high protein feed, limiting ethanol production will only further complicate drought related feed issues and costs.”

The NFU and other groups have called for the creation of a federally owned grain reserve, similar to the one in place for petroleum. When questioned on the subject, a livestock representative on the conference call said their organizations were focused on more “immediate relief.”

This week Congress expects to vote on a number of measures aimed at disaster relief for the drought, particularly for beef, pork, and poultry farms -- sectors that are not partially shielded by government subsidies.  

Copyright 2012 ABC News Radio

Wednesday
Jul252012

Food Prices Could Rise 5 Percent in Next 9 Months

Jupiterimages/Pixland/Thinkstock(WASHINGTON) -- The cost of filling grocery carts in America is going up. The U.S. Department of Agriculture announced Wednesday that it is projecting as much as a five percent price hike for some food items over the next nine months.

“Of course I’m concerned,” said shopper Barbara Webb. “I’m concerned for the people who can’t afford it.”

Behind the expensive jump is the drought, now covering 60 percent of the United States, pushing up prices for feed that translate into higher prices for beef, pork and chicken products.

Beef prices will see the biggest hike, up four to five percent, according to the USDA. That means the ground beef purchased last year for $2.77 per pound will cost consumers $3.04 per pound next year.

Dairy product prices will increase by 3.5 to 4.5 percent, bumping a gallon of milk from $3.57 in 2011 to $3.84 in 2013.

The price of eggs will also go up by three to four percent, making a dozen eggs $1.95 per dozen in 2013, compared with $1.77 in 2011.

If USDA’s economists are correct, a family who spends $150 per week on groceries will now be spending $160 by next year, bumping their annual food budget up more than $500.

Lisa Lee Freeman, editor-in-chief of ShopSmart magazine, has a few tips for families trying to keep their grocery bills down, despite the anticipated hike.

"The best thing you can do is if all you’re doing is clipping coupons in newspapers -- go online!” Freeman said. “There are literally hundreds of coupons online and if you’re not tapping that, you’re missing out on a huge resource for savings.”

Freeman also recommends buying store brands in supermarkets, joining warehouse clubs and even shopping at dollar stores to save the most money.

"Things are changing and the dollar stores are now carrying brand name items,” Freeman said. “Prices can be up to one-third cheaper at the dollar store than at the supermarket.”

The 2013 food price forecast projects an overall food price hike of three to four percent, higher than the normal annual grocery inflation of 2.8 percent.

The recent announcement is also the USDA’s first projection to factor in the drought.

David Lobell, writes studies for Climate Central, monitoring global warming. He says farmers should prepare for tougher growing conditions and higher prices in the future.

"This year is very emblematic of the type of thing we worry about with climate change,” Lobell said. “The new normal for agriculture is going to be frequent episodes of very high temperatures. Temperatures at which pretty much any crop does not do very well.”

Copyright 2012 ABC News Radio

Thursday
Jul192012

Milk Prices May Rise as Drought Spreads

Noel Hendrickson/Digital Vision/Thinkstock(NEW YORK) -- The devastating heat and drought that now covers more than half the continental U.S. is taking its toll on farmers and their crops.  The price of soybeans and corn have hit a new high and wheat prices are at their highest levels in more than four years.

But how will this affect consumers?

Supermarket prices for some foods may rise, but it’s not yet clear how big the increase will be.  Some of the first products that will likely be hit with higher costs are milk and cheese, since cows are producing less milk.

But for now, “milk prices are actually the lowest they’ve been in 18 months because of surpluses built up over an ultra-mild winter and spring," reports USA Today.

Meat prices will likely follow, rising later this year.  And while grain price increases will have some impact on consumers, they make up a relatively small share of processed food costs.

Copyright 2012 ABC News Radio

Wednesday
Jul182012

As Drought Persists, Agriculture Secretary Tom Vilsack Prays for Rain

SAUL LOEB/AFP/GettyImages(WASHINGTON) -- Agriculture Secretary Tom Vilsack is looking for some divine influence to bring relief from the drought, which is devastating crops and likely to push up food prices.

“I get on my knees every day,” Vilsack told reporters at the White House Wednesday. “And I’m saying an extra prayer now. If I had a rain prayer or a rain dance I could do, I would do it.”

Sixty-one percent of the U.S. is experiencing a drought, the worst in 25 years. Blistering heat and a lack of rain are threatening close to 80 percent of the corn and soy bean crops, leading to declining yields. The country’s livestock is also in harm’s way as a result.

“Our hearts go out to the producers, the farm families who are struggling through something that they obviously have no control over and trying to deal with a very difficult circumstance,” Vilsack said, following his Oval Office meeting with President Obama.

As of Wednesday, nearly 1,300 counties have been designated as disaster areas.

The secretary admitted that the drought, which is already driving up corn and bean prices, will likely impact the greater economic recovery.

“One out of every 12 jobs in the economy is connected in some way, shape or form to what happens on the farm,” he said. “So, obviously, this drought will provide some degree of uncertainty.”

Vilsack urged Congress to provide help and assistance to the nation’s farmers.

“The most important thing is for Congress to take action to provide some direction and assistance so that folks know what’s going to happen, what kind of protection they’re going to have,” he said. “That certainty is really important, and that’s whether they want to get to work on the food, farm and jobs bill, they want to develop a separate disaster program or an extension of existing programs, whatever it might be. Having that done as soon as possible will be quite helpful.”

In the meantime, the USDA is opening areas in the Conservation Reserve Program for emergency grazing and giving farmers access to low-interest federal loans.

Copyright 2012 ABC News Radio

Tuesday
Jul172012

Higher Food Prices Likely as Drought Worsens

Ryan McVay/Photodisc(NEW YORK) -- The price of many food products could increase later this year as much of the country is hit with the worst drought in a generation.

Wholesale corn prices shot up nearly 5 percent Monday, and soybean prices are also heading higher.

Crop losses will be a blow to America’s rural economy and cut farm exports. The U.S. Agriculture Department slashed its estimate of this fall’s corn crop by 12 percent – compared with last month’s forecast. Officials say 38 percent of the corn crop is in poor condition because of the drought. A shortage of corn and soybeans is raising concerns about global food shortages and inflation.

Still, it may take months for some food and meat costs to rise in supermarkets.

According to a government estimate, cereals and grains accounts for just 2 percent of the U.S. consumer price index.

Copyright 2012 ABC News Radio







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