The news continues to get worse for Iowa’s farmers. With virtually no rain last week, and no rain in the forecast for this week, the drought will only get worse and have an even bigger impact on the crops in the ground.
The best example comes from today’s crop update released by the U.S. Department of Agriculture. It found just 46% of Iowa’s corn crop rated as good or excellent. That’s the lowest level in nearly 20 years. This is a very troubling sign especially since there is very little rain and more heat in the forecast. The report also found very little soil is left in Iowa with enough moisture. And that’s something of particular concern. Because when the soil dries up, the drought will quickly accelerate and crops could die.
To give you an idea of just how bad this could be, the Drought of 1988 wiped out more than $120 billion in crops (when adjusted for inflation). That makes it one of the costliest natural disasters in history. This is the kind of calamity that farmers are heading for if a lot of rain doesn’t fall, and soon.
The impact of this disaster will be felt far beyond the fields of Iowa. Corn prices are already skyrocketing, nearing $8 per bushel in trading today. Speculators are preparing for the worst as it appears a large portion of what was supposed to be a record setting harvest could now be lost.
The drought is widespread and the impact will be widespread as well. The drought will likely become the story of the summer, perhaps the entire year, as farmers struggle to hold on to anything they can. A rough summer forecast, but there’s not much we can do but look up and hope for rain, just hope.