by InvestorPlace Staff | August 14, 2012 10:02 am
This summer’s drought has been absolutely brutal on American farmers. Nearly every state has felt the impact of low rain falls, particularly in the Midwest, where drought has been the most extreme and where most U.S. farming occurs. Earlier this month, agriculture experts predicted the U.S. corn yield would be the lowest in a decade.
This will almost certainly raise prices on a wide variety of goods, from cornflakes to soda to ethanol. One of the most drastic impacts the drought has already been having is on livestock farmers. Increases in corn costs mean an increase in the cost of feed, which has forced many of them to prematurely slaughter or sell their animals.
The United States Department of Agriculture is looking to step in and help, though. The USDA announced it will be buying up to $170 million in meat from farmers affected by the drought.
Up to $100 million will be spent on pork, $50 million on chicken, $10 million on lamb, and $10 million on cat fish. Products purchased by the USDA will go towards several food assistance programs the department runs, like the National School Lunch Program and the Food Distribution Program on Indian Reservations.
This follows efforts by the USDA to expedite low-interest loans for drought-effected farmers, as well as decrease the interest rates on those loans.
– Benjamin Nanamaker, InvestorPlace Money & Politics Editor
The opinions contained in this column are solely those of the writer.
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