Your daily demand and supply:
The latest outlook released by the National Weather Service on Thursday forecasts increasingly dry conditions over much of the nation’s breadbasket, a development that could lead to higher food prices and shipping costs as well as reduced revenues in areas that count on summer tourism. About the only relief in sight was tropical activity in the Gulf of Mexico and the Southeast that could bring rain to parts of the South. ...
Yes, the drought has gotten so bad that we are hoping for a hurricane. Meanwhile, in the commodities markets the reduced supply is increasing prices:
An analysis released on Thursday by the United States Drought Monitor showed that 88 percent of corn and 87 percent of soybean crops in the country were in drought-stricken regions, a 10 percent jump from a week before. Corn and soybean prices reached record highs on Thursday, with corn closing just over $8.07 a bushel and soybeans trading as high as $17.49. ...
Since corn is an input for beef, higher input prices decrease supply and increase beef prices:
The withering corn has increased feed prices and depleted available feeding land, putting stress on cattle farmers. A record 54 percent of pasture and rangeland — where cattle feed or where hay is harvested for feeding — was in poor or very poor condition, according to the Department of Agriculture. Many farmers have been forced to sell their animals.
Because feed can account for nearly half of a cattle farmer’s costs, consumers could see a rise in the price of meat and dairy products, experts said.
And since corn-fed and grass-fed beef are substitutes, the demand for grass-fed beef will rise leading to higher prices.
*Taken from the famous poem.