Drought poised to drive up food prices next year, as farm aid is tied up in Congress

close

Video

Higher prices to hit grocery stores?

Impact of historic drought throughout country

On his farm in Newburg, Md., Chip Bowling rips back the silk on a freshly picked ear of corn, revealing the wrinkled, stunted kernels inside.

Without rain, he watches his corn yields go down day by day on the the land he farms on the East Coast. And the drought has been even more devastating to the farmlands of the Midwest and ranch land beyond.

Midwesterners are seeing the worst drought in 50 years. Eighty-eight percent of  U.S. farmland where corn is grown is now drought-stricken. Stunted feed corn and withered grasslands are forcing some ranchers to cull their herds.

"They are upset, they're frustrated, they're angry, they're concerned and they're worried," Sen. Pat Roberts, R-Kan., said on the Senate floor Wednesday night. "All across farm country, we are suffering from a severe drought which is a real emergency, historic in scope."

The U.S. Department of Agriculture forecasts that the drought will have an impact up the food chain and crimp the spending of already strained consumers next year. Corn is the primary feed for poultry, cattle and pork. USDA estimates that prices at the grocery store will jump next year by 4 to 5 percent for beef,  3.5 to 4.5 percent for chicken and turkey and 3.5 to 4.5 percent for dairy products, including milk, cheese and eggs.

Like most farmers, Chip Bowling carries crop insurance that will cushion the impact of his yield losses.

"Most farmers now carry crop insurance. The inputs and the cost of raising a crop of grain is way too much risk to expose a farmer on a year like this," he said.

But ranchers do not have similar coverage. They've gotten disaster relief in the past from Congress, but the provisions of the current farm bill that would provide such relief have expired. A new farm bill, which passed easily in the Senate in June remains bottled up in the House, as Democrats resist any Republican attempts to cut it. Especially sacrosanct to House Democrats is the Supplemental Nutrition Assistance Program, commonly known as food stamps, which makes up 80 percent of the farm bill appropriation.

In a speech Thursday from the House floor, Rep. Tim Walz, D-Minn., said its all the more crucial to farmers that the bill be passed  given the unprecedented drought conditions.

"Never before has a farm bill been this close to being passed and blocked by House leadership," Walz said.

But Republicans are reticent to add to deficit spending without offsetting cuts. Democrats fear those cuts would inevitably target food stamps to some degree.

Even so, both sides see room for compromise.

"We're continuing to work with Chairman Lucas and the members of his committee on an appropriate path forward," House Speaker John Boehner told reporters on Thursday. And Rep. Collin Peterson of Minnesota, the top Democrat on the Agriculture Committee, says that he would be for a year extension of the farm bill with an undetermined amount of drought money on top, if it gets a five-year overall bill to a conference committee with the Senate.

Meanwhile, in an unexpected irony to the drought, the culling of so many cattle is expected to result in a glut of beef on the market, lowering beef prices this summer -- before they go up again next year.