The United States Agriculture Department today released its Crop Production Report, which details the progress of a number of the country’s major cereal, horticulture and arable crops. The report has been hotly anticipated, as it reveals the effect the United States’ most severe and expansive drought in over fifty years has had on food production.

Although the report showed wheat production is progressing well, with forecasts up two per cent compared to last month’s estimates, currently standing at 2.27 billion bushels, the United States’ major crops of maize, soy and cotton have all suffered as growing regions have endured scorching temperatures and little rain over the summer months.   

Although cotton plantings increased in 2012, yields are expected to be down this year. Cotton production has increased 13 percent since 2011, but yields are estimated at 784 pounds per harvested acre, down 6 pounds from last year.

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Although other global regions, including Russia and the Black Sea and India are suffering from little rainfall, which has led to drought conditions, the extent and impact of the drought in the United States has caused widespread concern. Drought conditions have led to farmers killing animals in order to save on feed and the House of Representatives last month acquiesced to calls made by Agriculture Secretary Tom Vilsack to open environmentally sensitive wetland and areas under conservation management for grazing in drought stricken regions.

The House also expedited legislation which would increase support for farmers. Livestock farmers have been left without any access to support payments and the declaration of drought affected zones as ‘natural disaster areas’ during July created the opportunity for cut rate loans to farmers in these areas.

Virtually all of the contiguous United States has seen temperatures of between 1 and 8^oF above average for July. The hottest temperatures on record have been observed across the Northern and Central Plains and the Great Lakes region. Although rainfall has eased the situation on the ground and revived some immature crops in the Gulf States, elsewhere little or no rain fell during July; throughout the United States as a whole, rainfall in July was less that 50 per cent of the monthly average.

USDA summarised in its report today, “July brought little relief from the unusually hot temperatures and below average rainfall experienced during June. Crop conditions in many locations deteriorated under record-setting temperatures and prolonged dryness.”

Maize

As a result of the ongoing drought, which is the most severe experienced in the United States since the 1950s, maize production has dropped 13 Percent from 2011 levels; this drop comes in spite of increased plantings which had put the country on track towards record production.

Maize production is now forecast at 10.8 billion bushels (274Mt), the lowest level of production since 2006 and a 27 per cent fall from June estimates. Yields are forecast to be the country’s lowest in over a decade, having been estimated at 123.4 bushels per acre, on 1st August. The USDA stated in its report, “July brought little relief from the unusually hot temperatures and below average rainfall experienced during June. Crop conditions in many locations deteriorated under record-setting temperatures and prolonged dryness.” Drought came at exactly the wrong time for maize crops, which were pollinating when weather conditions deteriorated in June and July.

Overall, 24 percent of the US maize crop is now in ‘good to excellent’ condition, compared to 48 percent on July 1 and 62 percent at the end of July last year. USDA said this years’ is the lowest ‘good to excellent’ rated crop since 1988, when 19 percent of the corn crop was recorded as such. 48 percent of maize is currently rated to be in ‘very poor to poor’ condition, compared to only 14 percent last year. In eight of the major corn producing States, 50 percent or more of the corn acreage has fallen into the bottom two condition categories.

Soy

Although the crops have proven more resilient in the face of drought, soybean production has also been affected, falling 12 Percent from 2011 levels. Soy production is forecast at 2.69 billion bushels (83Mt), with yields expected to average 36.1 bushels per acre, down 5.4 bushels from last year. Although not as poor as the maize crop, soy yields are on track to becoming the worst since 2003 if conditions do not improve.

Whilst some rain has fallen on the US corn-belt, USDA officials said its effects have been limited, and that what little precipitation has fallen has done “little to alleviate the ongoing drought stress affecting the Nation’s soybean crop.” As with the nation’s maize crop, hot and dry weather coincided with blooming, when additional moisture is crucial for advancing phenological development.

According to government officials, following a promising start to the growing season “As pod setting began, record setting heat coupled with continued below average rainfall led to increased crop deterioration.” Overall, 29 percent of the country’s soybean crop is reportedly in ‘good to excellent condition,’ compared with 45 percent at the beginning of the month and 60 percent at the same time in 2011. As with the maize crop, this is the lowest such rating since 1988 when 24 percent of soybeans were reported to be in ‘good to excellent’ condition.   

On the back of crop concerns from the United States and other regions which have been hit by adverse weather this year, including the EU and, earlier in the year, South America, world food prices rose 6 per cent in July. This hike, which reversed a trend of gradually easing prices, has sparked fresh concerns over a potential food crisis.

Before releasing the organisation’s Food Price Index, economists from the UN Food and Agriculture Organisation expressed concern over grain rallies which saw maize prices reach record highs in July. The FAO experts said such activity, exacerbated by commodity speculation, could result in reducing access to food for the world’s poorest, and sparking a food crisis despite the fact that world reserves of staples such as rice and wheat remain better stocked than in 2008, when scarcity and record food prices are thought to have contributed to a series of uprisings around the world.   

The full report can be read here.

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