Guest Post: The U.S. Drought Is Hitting Harder Than Most Realize

Tyler Durden's picture




 

Submitted by Chris Martenson of Peak Prosperity,

 

This is an important update on the U.S. drought of 2012, the combined record-setting July land temperatures, and their impact on food prices, water availability, energy, and even U.S. GDP. 

Even though the mainstream media seems to have lost some interest in the drought, we should keep it front and center in our minds, as it has already led to sharply higher grain prices, increased gasoline costs (via the pass-through of higher ethanol costs), impeded oil and gas drilling activity in some areas (due to a lack of water), caused the shutdown of a few operating electricity plants, temporarily reduced red meat prices (but will also make them climb sharply later) as cattle are dumped in response to feed- and pasture-management concerns, and blocked and/or reduced shipping on the Mississippi River.  All this and there's also a strong chance that today's drought will negatively impact next year's Winter wheat harvest, unless a lot of rain starts falling soon. 

The good news from Hurricane Isaac is that he's traveling on a perfect path to deliver relief to one of the most heavily drought-impacted areas:

There are steps that everyone can and should take to become more food- and fuel-resilient in case the drought persists – as some experts think is quite possible – into next year and perhaps a few more. We'll get to those steps shortly.

Further, there will be a definite impact to U.S. GDP, which could add to pressures (excuses?) that the Fed may use to justify additional quantitative easing (QE) measures (otherwise known as 'printing more money'). 

U.S. Drought Intensifies

The drought in the U.S. has intensified in the recent weeks, even though it has somewhat dropped from the front pages of mainstream media, possibly because the story is stale or possibly because it's just too serious to dwell on for long:

Extreme drought in the U.S. intensifies

Aug 17, 2012

The drought in the United States is continuing to intensify, according to the National Oceanic and Atmospheric Administration (NOAA).

 

The latest Drought Monitor says 61 percent of the contiguous United States faces moderate or worse drought conditions this week.

 

Nearly 30 percent is experiencing extreme to exceptional drought, exceptional being the most severe category.

 

Officials say the amount of land that's currently affected across the U.S. is larger than the entire state of California.

In this next image, it is notable that the areas of the highest drought classification -- 'exceptional' -- have dramatically expanded from the prior week (the August 7, 2012 report).

(Source

Much of the drought is centered squarely over the U.S. 'breadbasket' region and has really dented this year's harvests in a big way.

Crop Losses

Certainly the number one story around the U.S. drought centers on its impact on grain production, specifically corn and soybeans.  In a minute we'll discuss the other impacts, but we'll start with the one that has the greatest potential to cause both suffering and strife over the coming months (and possibly years), especially for those on limited budgets.   

In 2011, the U.S. reaped a corn harvest of some 314 million tons.  In 2012, the USDA has estimated a harvest of 274 million tons – a shortfall of 40 million tons – despite record acreage being planted.

While the USDA has been steadily reducing their crop estimates, practically with every passing week, it seems likely that the USDA remains behind the curve today, as it has been every step of the way. A different source for information comes from the Pro Farmer Midwest Crops Tour, which is coming in slightly under the current USDA estimates:

Crop Tour Points to Sharper Drought Impact on Soy, Corn

Aug 21, 2012

Initial reports from the closely watched Pro Farmer Midwest Crop Tour suggested more crop damage than expected from the drought, raising the potential for diminished soybean production this fall and sending futures sharply higher.

 

The disappointing crop reports from scouts touring fields on the Pro Farmer crop tour in states such as Ohio and South Dakota make it hard to believe soybean yields will reach current U.S. government crop projections, said Don Roose, president of advisory and brokerage firm U.S. Commodities in West Des Moines, Iowa.

 

The market is in the "watch and worry" mode on all fronts as shrinking crop forecasts will further tighten supplies already projected to dwindle to precariously tight levels in 2013, Mr. Roose said.

 

On the annual Pro Farmer tour, analysts and investors walk corn and soybean fields in seven Midwestern states over four days to assess prospects prior to the fall harvest. Pro Farmer is an agricultural advisory firm. The Pro Farmer tour, which wraps up Thursday, reported diminished potential for the soybean crop in both Ohio and South Dakota.

 

The crop tour doesn't estimate soybean yields, but it reported an average 584.9 pods per 3-foot-by-3-foot square area in South Dakota, down 47% from a year ago. In Ohio, scouts reported soybean counts at an average of 1,033.72 pods per 3-foot-by-3-foot square area, down from 1,253.2 pods a year ago.

 

Soybeans entered their critical growing phases in recent weeks, and the crop has benefited in some regions from recent rains across the eastern Farm Belt.

 

Meanwhile, scouts with the Pro Farmer Midwest Crop Tour on Monday reported an average estimated corn yield in Ohio of 110.5 bushels per acre, down from the tour's estimate of 156.3 bushels a year ago. In South Dakota, tour scouts reported an average yield estimate of just 74.3 bushels per acre, down from 141.1 bushels a year ago.

 

While commodities traders and agronomists have braced for weeks for the prospect of a crop decimated by drought, the estimates were lower than many had expected.

The summary here is that the Pro Farmer Tour is reporting crop yields to be 2% - 3% lower than current USDA forecasts, which is a big deal when it comes to food.  We're talking a few tens-of-millions-of-bushels' difference.

The somewhat sour note in this unfolding drama is the fact that 40% of the nation's corn crop goes to ethanol producers, which means that food will be burned in the nation's auto fleet instead of helping to keep prices down for consumers and animal feed.  Another 40% goes to animal feed (chicken, cattle, hogs, etc.), and the remaining balance goes to direct human consumption. 

However, the ethanol mandate is a congressional requirement for our fuel blenders, so they do not have a choice in the matter.  It would literally take an act of Congress to even temporarily suspend the ethanol requirement – and in an election year, that's just not going to happen, given the powerful constituencies invested in preserving that mandate.

Of course, higher input costs will ripple through the entire chain, so perhaps Bernanke will get the inflation he seeks, although it won't be the one he wants.  The inflation he wants is simple monetary-driven inflation.  The inflation he will get is nothing more than a supply/demand mismatch.

Still, the USDA has a handy calculation for estimating the future impacts:

U.S.’s inferior corn crop has supply-chain ramifications

Aug 13. 2012

The USDA has provided considerable information about how the drought’s effects were likely to percolate through the economy. Because of a smaller-than-expected corn crop, the USDA said it can make the general prediction that “we will see impacts within two months for beef, pork, poultry and dairy (especially fluid milk). The full effects of the increase in corn prices for packaged and processed foods (cereal, corn flour, etc.) will likely take 10-12 months to move through to retail food prices.”

 

The USDA has a formula for predicting changes in the rate of inflation caused by gains in prices at the commodity level: if the farm price of corn rises 50%, retail food prices rise by 0.5% to 1% as measured by the Consumer Price Index (CPI).

 

The price of September corn futures from mid-June until early August advanced 55%, meeting the USDA’s criterion for a measurable increase in the CPI Lapp presented a more extreme scenario than the USDA.  He predicted that the damage to the 2012 corn crop will translate into a food inflation rate of 4% to 5% in 2013. In his view, the dollar cost of the drought already was $30 billion, which accrued rapidly over the summer.

 

“This is a cost that somebody has to bear,” Lapp said. “Some price hikes are fairly quick and others take a while.”

 

He said high feed costs will have to be absorbed by producers, who will likely liquidate part of their cattle and swine herds and poultry populations. At the retail level, the drought’s effects will translate into narrower margins — and expected higher prices — for processed food and soft drink manufacturers among others.

 

Lapp offered his opinion that legislation that has effectively required 40% of the corn crop be used in making biofuels has made everything worse.

 

“The situation has been aided and abetted in a negative way by the biofuels mandates,” he said. “Shame on us for having mandated so much to corn ethanol” without creating contingencies for a bad crop year. 

Because corn is the base unit for so many things (especially in the form of high-fructose corn sweetener), and because it's a primary feed component for finishing cattle and raising chickens and hogs, it tends to have a pretty decent impact on food prices.

However, it takes time for those price hikes to work through the system. So it will not be until 2013 sometime that we really begin to feel it in the U.S.  And for the rest of the world that lives more directly on grains?  They're not as lucky.  The price hikes hit them almost immediately.

It looks like the harvest in Russia will be below expectations as well:

Russia harvest forecasts cut as drought hits crop in east

Aug 20, 2012

(Reuters) - Two leading Russian agricultural analysts cut their forecasts for Russia's grain harvest on Monday after harvest data from two drought-stricken eastern growing regions reduced the outlook for the overall crop.

 

SovEcon narrowed their grain forecast to 71-72.5 million metric tonnes (...)

 

The government's official grain harvest forecast is 75-80 million tonnes, of which 45 million tonnes could be wheat. The government has put this season's exportable surplus at 10-12 million tonnes, a level seen by traders as an informal cap on exports.

 

The government has tried to reassure markets there will be no repeat of August 2010, when Russia's government shocked markets with a snap decision to ban grain exports when the scale of losses from major drought became clear.

 

The government has indicated that protective tariffs could be an option, though only after the end of the calendar year.

 

But traders widely expect limits to be imposed in some form, perhaps as early as November, after heavy exports in the early months of the season showed Russia could hit the 10-12 million tonne mark sooner than January.

Russia is still officially projecting 75-80 million tonnes but may only get 71 tonnes.  If the projected exportable surplus is 10-12 million tonnes, but Russia actually harvests 9 million tonnes less than their hoped-for projection, then its exports will have to decrease to plug that gap.

Here's the kicker: Russia has already exported a good deal of that amount. That is, the prospect of another Russian export ban this year is quite realistic. If we get one, then we can expect a repeat of the turmoil in the grain markets that we saw in 2010.

But there's another much more fundamental reason why we can expect higher prices going forward.

Need for Even Higher Prices

The good news is that there's still plenty of supply to carry us through to the next harvest.  However, demand is going to have to go down some, and the way we accomplish that is through the price mechanism. 

Right now, physical grain traders are saying that prices are too low and that unless they rise, we're going to run out of grain before the next harvest.  Obviously, that's not truly going to happen – increasing scarcity will cause prices to rise until current demand levels are reduced.

Fall in corn price disguises real picture

Aug 20, 2012

Corn prices surged this month to an all-time high of $8.4375 a bushel on the back of the worst drought in the US in nearly half a century. But prices have since fallen roughly 5 per cent. The impression is the rally has run out of steam.

 

This is far from the real picture.  Prices need to rise again – probably setting all-time highs – to dampen consumption that is running ahead of supply.

 

If demand does not slow down, silos will be all but empty before the next harvest arrives in late 2013.

 

On paper, the balance sheet for corn supply and demand published by the US Department of Agriculture seems good enough. But in practice, the numbers look a bit shaky. The agency, whose figures are closely watched by the market, first estimates supply and, after that, adjusts the demand data to maintain a minimum level of inventories.

 

This time the USDA is asking for monumental rationing on the demand side. For example, US corn feed and export demand will need to drop to their lowest levels in nearly 20 years.

 

The USDA is also forecasting lower ethanol production – and thus corn demand. Ethanol output has fallen, but not nearly enough. Worse, the rise in wholesale petrol prices back above $3 a gallon means that ethanol producers are profitable again, even when paying record corn prices.

 

Corn is now trading just above $8 a bushel – but traders in the physical market say that prices need to rise to $9-$10 to force demand down enough to meet the consumption levels anticipated by the USDA.

 

The retreat in corn prices over the past couple of weeks has given inflation watchers a false sense of security. The market should not relax, however. More food inflation is just waiting around the corner.

The idea here is that the cash market will have to lead the futures market higher, an odd situation because it is usually the other way around.  With so many hedge funds now playing in the commodity space, one explanation is that they are simply playing paper games with each other – those playing the short side will get a lesson in the importance of keeping one eye on reality.

A truly shocking event would be if the U.S. ever gets to the position of limiting exports of corn or even soybeans.  That is a very unlikely proposition to consider, but if the silos get drained because we have dysfunctional markets that saw fit to keep prices bizarrely low while our free trade agreements allow the too-low grains to be exported, threatening domestic supplies, then that possibility notches up a little bit.

Dairy, Meat, and Even Higher Gasoline Costs

While it is clear that basic grain prices are heading higher, the knock-on effects into other soft commodities are a little less clear, but are definitely still important to consider. 

The most obvious of these are higher grain feed costs that will hit both livestock and dairy producers especially hard:

The withering crops are translating into higher feed costs for livestock producers. "This is different than anything I've ever experienced," said Kent Pruismann, who raises cattle and hogs on a farm in Sioux County, Iowa, and saw his costs for feed jump by 20% in July.

 

The higher corn, soybean and wheat prices will reach food makers, exporters and eventually consumers. Drivers already have seen fuel costs climb because of higher prices for ethanol, a corn-based fuel that is blended into gas. The drought also has reignited the debate over whether ethanol production is a drain on global food supplies.

(Source)

Some are already turning to, shall we say, other means to keep their herds fed:

Kentucky cows eat candy instead of corn

Aug 14, 2012

LOUISVILLE, KY (WAVE) – When you think of cattle feed, you probably don't think of candy, but due to the drought that's exactly what one farmer chose to do.

 

At Mayfield's United Livestock in Western Kentucky, owner Joseph Watson feeds his herd second hand candy.

 

Watson started feeding his cattle the candy because corn prices were so high.

 

He mixes the candy with an ethanol by-product and a mineral nutrient. He monitors the daily intake and said the cows have had no real health issues.

Yes, the higher grain costs are going to hit everything from big cattle feedlot operations to my own two-bags-a-month chicken-feed usage.

However, it will be the cost of and even lack of hay that will really create some big problems later this year.  The drought not only harmed the range and pasture lands, forcing greater use of stored hay to offset the decline in forage, but it put a huge crimp in this year's hay production:

Drought Cripples Hay Feed Industry

Aug 19, 2012

Widespread drought has scorched much of the pastureland and hay fields needed to sustain cattle herds in the U.S., forcing many ranchers to find feed alternatives or sell their animals early into what has become a soft beef market.

 

The shortage has led to higher hay prices, with some farmers saying they have to pay two to three times last year's rates.

 

Despite farmers setting aside more land to grow hay this year, they are still producing a lot less because of the drought, according to a recent Department of Agriculture estimate.

 

The harvest of alfalfa, generally considered to make the best hay because of its high nutrient levels, is forecast to be the worst since 1953, according to the USDA.

 

Pasture grass and hay are what most cattle are fed for the roughly two years they live before being slaughtered, but the drought is threatening to starve the animals.

 

Illinois rancher Steve Foglesong said that most years he could graze his cattle from spring through November on verdant fields that are now brown, buying them hay bales only in the winter. This year, he and his animals have their eyes on withered corn plants.

 

"It may not have any ears on it, but it makes pretty good cow feed," he said.

 

John Erwin, who owns 20 acres of land in Shelbyville, Ill., said he is having trouble growing alfalfa hay, but demand is strong for what he can produce.

 

"I'm getting calls from ranchers as far away as Wyoming," Mr. Erwin said. "They're desperate."

 

He said he has been offered $250 a ton for his hay, nearly double the $130 a ton in a non-drought year. His fields didn't produce any hay in July.

A doubling of hay prices is obviously going to create quite a bit of economic hardship for many farming operations, which tend to be marginal profit businesses even when everything is going well.

Here's another view on the hay situation:

I spoke with Caldwell [of Indiana horse rescue] and a number of other horse-rescue organizations around the country by telephone this week. The relentlessly hot dry weather, amplified in many areas by wildfire, has been devastating to farmers, ranchers and other horse owners.

 

“Everybody is using their winter hay now. The pastures are destroyed and they probably won’t recover before winter,” said Caldwell. “The price of hay has doubled, and the availability is down by 75 percent.”

 

Caldwell is somewhat sanguine about his own lot, but not optimistic about what lies ahead.

 

“Today the problem is not nearly as bad as it’s going to be,” he told me. “It’s terribly bad today, but it is going to get a lot worse.”

(Source)

The drought has done some very serious harm to the nation's hay supply that goes beyond the economics of higher hay costs.  First there's the supply of the hay, and then there's the relatively poor quality of hay that was taken from non-irrigated, drought-stricken fields.  All in all, it's not a good situation. 

To add a bit more difficulty into the situation, it turns out that drought-stricken silage and even the corn itself can be harmful to animals:

Drought makes corn dangerous for livestock

Aug 16, 2012

COLUMBIA, MISSOURI, U.S.  — Tim Evans, an associate professor of veterinary pathobiology and toxicology section head at the Veterinary Medical Diagnostic Laboratory at the University of Missouri College of Veterinary Medicine, Columbia, Missouri, U.S., warns U.S. farmers and livestock producers that drought-damaged corn plants can pose a risk to animal health.

“During severe drought conditions, corn plants, especially those heavily fertilized with nitrogen, can accumulate a chemical called ‘nitrate’,” Evans said.

 

“This chemical can be very harmful to animals, especially cattle, if they eat corn plants or other vegetation containing too much nitrate. Eating plants with too much nitrate can cause damage to red blood cells, resulting in lethargy, miscarriage, and even sudden death.”

 

Evans says that in normal conditions, corn crops typically absorb nitrate into only the lower 12-18 inches of the stalk, which does not have to be fed to animals. However, during severe drought conditions, high concentrations of nitrate can accumulate in the upper portions of the stalk, which cattle and other livestock often eat.

 

Evans also says that many naturally growing plants and weeds in grazing pastures can accumulate nitrate during drought conditions, as well. These plants include many types of grasses and some weeds, which animals might be forced to eat because of limited pasture or hay available as forage for livestock. 

The key here is that nitrates are safe below 2,000 ppm but toxic above 15,000 ppm, and the levels found in the stalks and how high it travels are a function of whether enough rain fell to allow the plant to take it up.  Much of the corn crop was so desiccated that the plants could not even manage to draw up this nutrient, and therefore it is safe as a feed product.

While it's hard to get a read on at this early stage, there are enough warning signs here pointing to much, much higher grain, food, and meat prices in the future.  The worry is whether there will even be enough feed to sustain the animal populations through the Winter and Spring. Given the damage to the harvestable corn, a lot of it is going to be turned into silage

Many ranchers and farmers are faced with a horrible choice here.  Saving their herds may be economically unsound or even impossible where hay and safe silage are not available, and so they are selling their herds, one of the most heart-wrenching decisions anyone could have to make.

So many are doing this that recently the price for cattle has dropped, as everyone is selling into an increasingly soft market.  My advice is to enjoy these low meat prices while they last, because the next stage of this story involves much higher meat prices.

The problem with understanding just how bad the hay situation might (or might not) be is that there are no national statistics collected that could tell us whether or not there's even enough hay available to sustain the current commercial and recreational livestock populations. 

The Importance of Positioning Yourself

So, with all of these repercussions building during the current drought – to which there's yet no end in sight – what can you do today to minimize their impact on your budget and lifestyle?

Part II: Positioning for the Drought's Aftermath looks at the likeliest outcomes in food prices, food availability, energy prices, and macroeconomic consequences (of which there will no doubt be many from this drought). We have a national food distribution system that runs significantly on a just-in-time basis, which leaves it vulnerable to price and inventory shocks when there are supply disruptions. The reduced water levels caused by the drought are handicapping electrical power generation in growing regions in the country; electrical thermal plants are the number one biggest user of water in the U.S.  The global financial markets are similarly tenuous these days, as resources are already taxed in trying to stimulate the moribund U.S. economy and dig Europe out of its massive credit woes.

This is one of those moments where taking simple, prudent steps now can have an outsized effect on preserving your quality of life. 

Click here to read Part II of this report (free executive summary; paid enrollment required for full access).

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Thu, 08/30/2012 - 11:38 | 2749632 Death and Gravity
Death and Gravity's picture

Another good reason to stock up on food supplies: Future "exceptional droughts" and climactic events WILL cause shortages and price spikes you'd rather avoid.

Thu, 08/30/2012 - 11:46 | 2749653 Michael
Michael's picture

We have no large amounts of food stored in reserves in the US.

It's the whole Joseph of the Old Testament Bible economic strangulation of the sheeple plan re-played on us again.

This cycle is almost complete. De industrialized, no food stores, stupid sheeple.

Thu, 08/30/2012 - 11:53 | 2749679 CPL
CPL's picture

http://www.japantoday.com/category/kuchikomi/view/as-gasoline-stands-shu...

 

SOmething I've never heard of in my lifetime.  A technology driven country with a HUGE elderly population that imports EVERYTHING, cannot get oil, fuel..gas...whatever we call it.

 

All signs point to correct Michael

Thu, 08/30/2012 - 11:58 | 2749700 Michael
Michael's picture

They should have killed that Joseph when they had the chance.

Thu, 08/30/2012 - 12:34 | 2749822 CPL
CPL's picture

I wonder what the Japanese equivalent is of Joe is?

 

Akira?  Ken?...every Japanese movie seems to have a Ken in it.

Thu, 08/30/2012 - 20:25 | 2751148 Slack Jack
Slack Jack's picture

This drought is no big surprise; Data from the National Oceanic and Atmospheric Administration, tells us that;

The last 16 years include the 15 HOTTEST years on record.

http://www.scienceagogo.com/forum/ubbthreads.php?ubb=showflat&Number=42682

Including 2011 with their data tells us that the last 17 years include the 16 HOTTEST years on record.

And in a few months this will be;

the last 18 years include the 17 HOTTEST years on record.

Thu, 08/30/2012 - 13:26 | 2749993 CPL
Thu, 08/30/2012 - 14:28 | 2750165 LMAOLORI
LMAOLORI's picture

 

 

So do you believe in the bible? 

Thu, 08/30/2012 - 16:25 | 2750567 PrintingPress
PrintingPress's picture

If you don't trust paper investments how can you trust a dusty old book of stories?

Thu, 08/30/2012 - 11:48 | 2749662 Jason T
Jason T's picture

better yet, build your own garden and grow own food.. if you live in house with a year Vs a coop in a city.

Thu, 08/30/2012 - 12:26 | 2749793 Death and Gravity
Death and Gravity's picture

Agreed.

Back in the ol USS of R, private household gardens, with the food and herbs they produced, was a significant part of not more people dying from hunger during the bad years.

Thu, 08/30/2012 - 13:17 | 2749969 Jack Burton
Jack Burton's picture

Yes, It may be hard for Americans to believe, but the old USSR managed, through it's inability to provide for the people, managed to foster great self reliance. This is what saw the families through the collapse of the USSR and then the collapse of the ruble.

I saw on both occasions how Russians grew and preserved their own food, worked as underground employees for eachother, helped family survive when the economic strucutre was nonexistent.

For necessity breeds inovation, and the Russian could inovate in their private lives to make up for the failure of socialism. Especially in food, the Russian learned to feed himself, the private plot for city dwellers was all that prevented the collapse of the USSR from turning to starvation.

Thu, 08/30/2012 - 13:28 | 2750001 CPL
CPL's picture

It's why Russia really isn't a "country" anymore.  Just fiefdoms of Moscow...until the power goes out and no TV or Radio to explain to people who is in power anymore.

 

I won't even bother with how fast computers and internet get chucked out.

Thu, 08/30/2012 - 14:16 | 2750142 Cthonic
Cthonic's picture

Didn't starve eh?  I'd say they're still starving.

http://larussophobe.wordpress.com/2010/02/24/editorial-russias-secret-st...

Thu, 08/30/2012 - 14:34 | 2750183 CPL
CPL's picture

It's across the planet right now.  With poor crops four years in a row, the food stockpiles are non-existent.

 

http://www.msnbc.msn.com/id/48039343/ns/world_news-south_and_central_asi...

 

Funny thing is the article points to everything BUT the obvious of nearly 1.5 Billion people being the cause of starvation.  After a while the technology required to storage and deliver is overwhelmed...then it just breaks and that is that. 

 

Picture holding back ants at a picnic, they are all very determined to get to the food.  You relax your direction for a moment, then there are 10k of the little buggers in the pie.  While you are cleaningthe pie, the buggers are in the potatoe salad, then the sandwiches...then the fruit...

 

Now take 1.5 billion people, don't feed 370 million of them and act surprised when they overrun an international nuclear power.  Sweet...well maybe not so much.

Fri, 08/31/2012 - 00:24 | 2751451 New World Chaos
New World Chaos's picture

Dmitry Orlov talked about this in "Reinventing Collapse".  Russian society had developed microeconomic robustness which America lacks.  America's collapse will be worse than the collapse of the USSR because the people are not equipped to handle it.

Yard farming is illegal for most serfs in the USSA.  During the collapse, people will have no food and no experience growing food.  Anyone who grows enough to get by will get raided.  Here's the plan:  Suburbanites will starve, surrounded by piles of bills, fines, worthless paper, broken Chinese crap, and a perfectly manicured lawn to keep up appearances.

Thu, 08/30/2012 - 12:40 | 2749837 Element
Element's picture

Pretty sure they're having a Hurricane ... like ... torrential rain... about right now ... where all that darkest red bit is.

http://www.nrlmry.navy.mil/htdocs_dyn_pregen_sat/PUBLIC/tc_pages/pages/t...

Thu, 08/30/2012 - 12:57 | 2749897 UGrev
UGrev's picture

How dare you show us satellite images of major storms dropping bucket loads of water.. you have some balls.. /sarc

Thu, 08/30/2012 - 12:19 | 2749774 battle axe
battle axe's picture

When people can not afford food, that is when the revolutions start. 

Thu, 08/30/2012 - 14:13 | 2750135 LMAOLORI
LMAOLORI's picture

 

 

Control the food control the people

 

The Farm Bill’s secret handout to big corporate farms

Thu, 08/30/2012 - 14:34 | 2750177 epwpixieq-1
epwpixieq-1's picture

This is why U of SA has so highly developed coupon system, which main goal is to suppress the roaring voices of the hunger having the power to change any de(spo/mo)cratic system.

Thu, 08/30/2012 - 19:22 | 2750997 emersonreturn
emersonreturn's picture

a farmer feeding his cows candy, a by product and mineral supplements...another great reason to avoid dairy and beef that isn't organic.

Thu, 08/30/2012 - 11:39 | 2749633 LawsofPhysics
LawsofPhysics's picture

Print up some more food, you stupid fucking central bankers, eh err, wankers!!!

Thu, 08/30/2012 - 11:40 | 2749636 GeezerGeek
GeezerGeek's picture

In the first year of Clinton's presidency the US was hit with major flooding. In (what may be) the last year of Obama's presidency the US has been hit with a major drought. Averaging the two years, we have just the right amount of water. Isn't math wonderful?

Thu, 08/30/2012 - 11:41 | 2749637 Aziz
Aziz's picture

Ethanol subsidies are one of the stupidest ideas Congress has ever had... and that's saying something!

Thu, 08/30/2012 - 12:45 | 2749865 Quinvarius
Quinvarius's picture

There is no production subsidy on corn ethanol. And it is cheaper than gasoline anyway.

Thu, 08/30/2012 - 13:21 | 2749950 LawsofPhysics
LawsofPhysics's picture

Half right.  There are fewer subsitdies, but production of ethanol is not cheaper than production of gasoline.  

Well unless you ignore all the diesel, gasoline, and coal that goes into planting, irrigating, growing, transporting, fermenting, and distilling the corn and the fact that producers get a guaranteed price to deliver from the oil refineries, which are subsidized. How convienient to forget this, must of slipped you mind.  My money is on biodiesel from algae.

Thu, 08/30/2012 - 19:26 | 2750987 Quinvarius
Quinvarius's picture

Dude.  Ethanol sells for cheaper than gasoline right now.  Please STFU and check the markets before you post.  How many times do I have to shoot your ridiculous posts down?

http://barchart.com/commodityfutures/Energies

Now again.  How does mixing in something that is cheaper than gasoline make gasoline more expensive?

Thu, 08/30/2012 - 11:42 | 2749641 WarPony
WarPony's picture

Earth to Isaac: "Everybody has to believe in something, and I believe I'll have another drink."

 

Thu, 08/30/2012 - 11:43 | 2749643 Red Heeler
Red Heeler's picture

The MSM is obscuring the extent of this tragedy.

People will get the picture this winter.

Don't be the grasshopper.

Be the ant.

Thu, 08/30/2012 - 13:14 | 2749961 LFMayor
LFMayor's picture

ant?  As in MS-13?  

point is, build your network now.  it's gonna be handy later.

Thu, 08/30/2012 - 16:17 | 2750544 thatthingcanfly
thatthingcanfly's picture

Guess they don't teach Aesop in public school anymore.

Thu, 08/30/2012 - 23:43 | 2751473 New World Chaos
New World Chaos's picture

The teachers are in league with the grasshoppers.  If they taught the story, they would teach that the ants are "evil hoarders" and, for the greater good, the locust horde must consume everything.  They must also take the ants off to FEMA camps where they can produce even more.   Lazy grasshoppers can be encouraged if they get a bit of worthless paper for narcing on ants.  This can all be facilitated by an elaborate system of laws, mindfucks, and whiny self-justification so that the grasshoppers and even most of the ants can feel good about the mugging by calling it something else.

Thu, 08/30/2012 - 11:43 | 2749646 wagthetails
wagthetails's picture

enough with the bad news, everything is fine. 

http://www.youtube.com/watch?v=d8IBnfkcrsM&feature=youtube_gdata_player 

 

Thu, 08/30/2012 - 11:43 | 2749647 Inthemix96
Inthemix96's picture

Jesus,

I need glasses, I read that headline as US draft is hitting harder than most realise?

These crafty fuckers wouldnt be trying something shifty would they?

Thu, 08/30/2012 - 11:46 | 2749654 GeezerGeek
GeezerGeek's picture

I could really use some hard-hitting draft beer. Are the ingredients for beer suffering from the drought? Now that would really stink!

Thu, 08/30/2012 - 11:48 | 2749659 Inthemix96
Inthemix96's picture

Geezer,

Dont give the fuckers ideas for gods sake man.  They might be reading this and take up your advice.

;-)

Thu, 08/30/2012 - 11:43 | 2749648 kito
kito's picture

cant the government just subsidize a new company to combine two parts hydrogen and one part oxygen?????????

Thu, 08/30/2012 - 12:45 | 2749866 Acet
Acet's picture

Are you nuts? Don't you know the dangers of dehydrogen monoxide!???

That stuff is dangerous, not only is it highly addictive - once you start on it, you will literally die if you stop - but it's also deadly on it's own with thousands dying every year from dehydrogen monoxide inhalation.

Thu, 08/30/2012 - 12:59 | 2749907 UGrev
UGrev's picture

BAN IT! ;)

Fri, 08/31/2012 - 02:35 | 2751662 Ar-Pharazôn
Ar-Pharazôn's picture

Blasphemy!!!! Witchcraft!!!!!!

 

burn him!!!!!!!

 

 

/sarc ;)

Thu, 08/30/2012 - 11:43 | 2749649 Shizzmoney
Shizzmoney's picture

I am kind of rooting for food hyperinflation to happen.  Then we can finally get pissed at TPTB and organize and start tacklign these problems, instead of arguing over which party is best for the country, when both really could give two shits about 80% of the country.

Thu, 08/30/2012 - 11:47 | 2749657 Inthemix96
Inthemix96's picture

You are being quite the eternal faith bringer Shizz,

They couldnt give two shits about 80% of the country?

Try 99% mate, its a club you and I have no place in.

Fucking filthy greedy scum

Thu, 08/30/2012 - 11:51 | 2749672 dwdollar
dwdollar's picture

Starvation or the fear of starvation will really get people moving. Unfortunately, I don't think it will be in the right direction. Not at first anyway.

Thu, 08/30/2012 - 12:03 | 2749719 Overfed
Overfed's picture

Food hyperinflation will get the sheeple moving alright. Straight into the FEMA camps.

Thu, 08/30/2012 - 12:15 | 2749762 pazmaker
pazmaker's picture

or straight to social services to get an increase on their SNAP card.

Thu, 08/30/2012 - 13:10 | 2749952 Red Heeler
Red Heeler's picture

 . . . . or straight to the rich folks' homes to see what's in their cupboards.

Thu, 08/30/2012 - 11:48 | 2749652 youngman
youngman's picture

It was a headline for a few weeks...but the MSM went on to other things....other soundbites...our minds can´t focus on one thing all the time.....but that separates the good investors from just the trenders....this drought could last for years...they usually do....Mississippi shipping.....will be down....trucks will take over...costs up....meat costs down then way up...this will affect everyone on a budget...and in a big way...but we can be assured the Fed will "see no inflation"....and if they do a QE..they will feed the fire of this hidden inflation.....we will know a lot more in a couple of weeks as the crops get harvested to see how close the estimates were....stay tuned...Tony the Tiger is going to get expensive

Thu, 08/30/2012 - 11:49 | 2749665 GeezerGeek
GeezerGeek's picture

this will affect everyone on a budget..glad to know that the Federal government will not be affected. Obama will still be able afford his imported Kobe beef, I presume.

Thu, 08/30/2012 - 12:19 | 2749772 pazmaker
pazmaker's picture

I doubt he is that stupid to be eating radiated imported kobe beef.  He can have all he wants just be carefull for radiation poisoning

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