Drought of 2012 Affects Food Prices – Capstone

Drought 2012

During the summer of 2012, most of the United States experienced a massive drought that spread across more than half of the 50 states. So far, 2012 is the warmest year on record for the United States. Higher than average temperatures along with a deficit in rainfall left crops shriveling in fields across the country.

According to the U.S. Department of Agriculture, this year has been the most severe and extensive drought in 25 years. The drought in 1988 25 years ago was more severe, but this drought could be better compared to that of the drought of 1956, when 58 percent of the country was in moderate to extreme drought.

Now, according to the USDA, 22-hundred counties across the United States are considered drought disaster areas. In mid-July, the office of Governor Scott Walker announced 23 counties in Wisconsin as primary natural disaster areas, including Walworth and Jefferson Counties.

So how does all of this dry weather ultimately affect food prices? To answer that, first we need to look at the weather until now.

“This drought has actually been going on since last fall, so almost a year now”

Dr. John Frye is a Geography and Geology professor at the University of Wisconsin-Whitewater. He says that the lack of precipitation from last winter, last spring, and this summer has contributed to the drought in Southeastern Wisconsin.

“That kind-of helped to lead us into this drought because, come springtime, that melt of the snow is getting down into the soil and storing our soils with that moisture. We didn’t have that, we didn’t have any precipitation this spring, and we didn’t have any precipitation in the summer so everything just kind-of snowballed on top of itself and, again, put us into these extreme levels of drought that we are currently in and are trying to get out of right now.

Specifically the southern portion of Wisconsin was hit with the drought, with more rain staying to the north and to the south of Walworth County.

“Typically in a normal summer, that fluctuates quite a bit, the track of those storms. But this year, we just saw a very consistent pattern of stuff moving up just in the north and stuff moving down to the south of us. And we were just kind-of sandwiched in between and that’s why we’re facing the drought conditions as we are.”

This recent lack of precipitation isn’t the only thing that’s kept crops from growing. In order for corn plants to receive the 20-24 inches of water they need, there also needs to be plenty of groundwater from the past couple seasons. As of December 9th, the U.S. Geological Survey says that northern Walworth County is experiencing groundwater levels of less than ten percent, considered much below normal.

Dr. Peter Jacobs, a professor in Geography and Geology at UW-Whitewater, says that the southern Wisconsin area needs that snow and rain for next year’s crops.

“The problem now is that the subsoil moisture, the storage has been depleted. And if we don’t get decent snowfall and rainfall, we’re going to start a new year in a drought condition.”

The lack of moisture we’ve seen in the soils so far, along with the lack of precipitation, have led the Department on Natural Resources to set emergency rules for crop irrigation applications, speeding up the process so farmers can use water from nearby lakes or streams. Dr. Jacobs says some farmers in the Walworth County area may not have been able to take advantage of this.

“There’s very little irrigation and most of the people, even though they had permission to do it, they didn’t have the stuff and the tools to be sticking the pumps in the lakes to be doing the whole-scale irrigation.”

Another problem with the crops this year may have been our early spring. The USDA stated that farmers entered the fields early this spring to get a head start on their crops. However, according to Casey Langan, executive director for Public Relations at the Wisconsin Farm Bureau, this action may have backfired on the farmers come July.

“And that came back to bite the corn growers that planted corn early. Because if they got into the field early this year, once we hit that drought this summer, they were the ones who were really affected by the heat and the long drought because the corn plants that were planted earliest in the state…. as they pollinated, we did not receive any rain. And corn plants have just a window of about 10 days where the plant is pollinating. And if it does not get some sort of drink of water during that crucial pollination period, then corn is not going to develop on the ear.”

Langan also reports that the average corn yield in Wisconsin this year is 125 bushels per acre, which may have been pulled higher due to more rain in the northern part of the state. He also says that total production of corn is expected to be about 431 million bushels, down 17 percent from 2011. This is better than what they expected earlier in the year. Langan gives some credit to the genetics of the corn.

“One of the ways that farmers have adapted is that the technology that goes into producing seed now, and the drought-resistant varieties of corn that we’ve developed really saved the day this year. If we did not have that kind of technology going into those plants, the story would have been much, much worse.”

And so far, the story’s been good. All except for corn feed prices, which rose to six-95 to eight-25 per bushel from the average six-22 per bushel last year, according to the USDA. This will consequently raise meat prices, but not right now.

Bryon Coleman is the vice president of food service and international sales at Jones Dairy Farm in Fort Atkinson. His company specializes in quality pork products, which uses pork product from other companies. Coleman says farmers are reducing their herds now to avoid the high cost of feed over the winter.

“So the farmer has a choice. Do I continue to feed these hogs at a higher cost or do I just take them to market now. And what a lot of farmers have chosen to do is bring hogs to market this fall. So you’ve seen some stability in the marketplace in the short term as a result of that because you’re seeing more animals brought in to be slaughtered and processed, so the supply is there.”

Reducing the herds is good for consumers right now, but may not be good for the future of meat prices. Farrowing, or the birth of new piglets, is expected to decline into next year as well, which could in fact lower supply enough to raise prices.

“So they’re reducing their own herds, which in the short term doesn’t mean anything, but then in the long-term means a lot. That simply means there’s going to be less supply in the future, which will rise prices up as a result.”

As for commodities such as shelved foods, the USDA says it may take up to ten to twelve months for the effects of price increases to reach retail markets. Such as Daniel’s Sentry Foods in Whitewater, whose store manager, Dennis Riley, said the same thing about commodities.

“Obviously when you pack product, you’re using product from past months. That then when you get into the new crop as far as packaging those products, that’s when you’ll notice more of a change.”

Riley also mentioned fuel prices affecting the price of food. Higher fuel prices could also mean a rise in food prices next year. According to the most recent report by the USDA, it is predicted that food prices will increase two-point-5 to three-point-five percent, relatively unchanged from the usual two to three percent.

No matter how unchanged the food prices may become, students at UW-Whitewater may still wonder how they’re affected by rising food costs. U-W-W Dining Services Marketing Director Ann Rakowiecki says students won’t see a change until the 2013-2014 school year.

“When it comes to retail prices, perhaps you get a sandwich that’s got tomatoes, lettuce, other vegetables on it that may have been affected by the drought. The same holds true for those retail prices is that we actually as dining services need to submit our plan for price adjustments to the university in writing in April or May of the prior academic year. And that’s what they will be for that year.”

The only exemption to the pricing agreement is if there’s a dramatic increase in an item such as milk, eggs, or meats. Even then, the price rise needs to be dramatic enough to only temporarily raise prices to cover costs.

U-W-W Dining Services can’t speculate whether food prices will rise on campus for next year. However, Rakowiecki says they’ll continue to work hard to make sure dining costs are low.

“And that’s been important to the university to do as student fees increase, as tuitions increase, and other expenses that students have increase, it’s been important to the university to keep that part of the student’s bill… to keep that under control the best that we can.”

So it looks like food prices won’t be affected, at least not right away. Meat prices are still expected to rise next year, along with a slight rise in commodity prices. Eighty percent of agricultural land in the United States is still experiencing a drought. According to drought.gov, Walworth County is still in a severe drought zone. The National Weather Service says Walworth County is expected to see some improvement with rain, but an ongoing drought until at least February of next year.

For 91.7 The Edge, WSUW News, I’m Kyle Johns.

[TRT: 10:02]

 

References

Abby, M., Pearson, M. (July 17, 2012). U.S. drought biggest since 1956, climate agency says. CNN. Retrieved from http://www.cnn.com/2012/07/16/us/us-drought/index.html

National Climate Data Center, NOAA (November 2012). State of the climate. Retrieved from http://www.ncdc.noaa.gov/sotc/

NOAA (December 6, 2012). U.S. seasonal drought outlook. Retrieved from http://www.cpc.ncep.noaa.gov/products/expert_assessment/season_drought.gif

Office of Governor Scott Walker (July 25, 2012). Governor Walker announces approval of federal disaster designation due to drought. Retrieved from http://www.wisgov.state.wi.us/Default.aspx?Page=1d01e354-7bb2-4e1e-adbc-980067f21cc6

Tinker, R. (December 11, 2012). U.S. drought monitor. Retrieved from http://www.drought.gov/drought/content/products-current-drought-and-monitoring-drought-indicators/us-drought-monitor

USDA Economic Research Service (December 11, 2012). U.S. drought 2012: Farm and food impacts. Retrieved from http://www.ers.usda.gov/topics/in-the-news/us-drought-2012-farm-and-food-impacts.aspx

USDA Economic Research Service (September 19, 2012). 2012 U.S. corn crop is forcast to have a record early harvest. Retrieved from http://www.ers.usda.gov/data-products/chart-gallery/detail.aspx?chartId=31841&ref=collection

USDA Economic Research Service (November 23, 2012). Price outlook: 2012-2013. Retrieved from http://www.ers.usda.gov/data-products/food-price-outlook/summary-findings.aspx

USDA Farm Service Agency (December 12, 2012). 2012 secretarial drought designations: All drought. Retrieved from http://www.usda.gov/documents/usda-drought-fast-track-designations-121212.pdf

U.S. Geological Survey (December 17, 2012). USGS groundwater watch. Retrieved from http://groundwaterwatch.usgs.gov/

UW Agronomy (October 16, 2012). Corn agronomy: Irrigation. Retrieved from http://corn.agronomy.wisc.edu/Management/L026.aspx

Candidates for 43rd Assembly Debate at UW-Whitewater

Whitewater – At UW-Whitewater’s Hyland Hall, Assemblymen Evan Wynn and Andy Jorgensen fought for their chance at the 43rd Assembly District seat.

Last night, the two incumbent candidates held a calm debate on Wisconsin issues such as education funding, collective bargaining, health insurance, and voter I.D. legislation.

Jorgensen defended his views on education funding and collective bargaining rights while Wynn held his position in support of Gov. Scott Walker’s decisions.

Both of these candidates are currently serving in the State Assembly and must run against each other to keep their jobs due to redistricting in 2010.

The Timmerman Auditorium at UW-Whitewater held an audience of 150 people as the candidates explained their stance on issues.

Wynn opened with a statement about his experience as a teacher and Army veteran, touting that it gives him “a unique perspective.” He also cited several publications for their ratings of his job in the Assembly so far.

Jorgensen explained his top priorities as education and jobs for Wisconsin workers.

Education

The first question was about keeping higher education affordable. Both candidates agreed that education is important, but didn’t agree on the actions each other have taken to reduce costs.

Wynn said “as a teacher, I understand the importance of education to get good-paying jobs.” He also said he voted for a tuition increase cap of 5 percent.

Jorgensen criticized the dramatic cuts that took place in the public education system in 2011, bashing Wynn for supporting cuts to corporate taxes instead.

“We need to prioritize,” said Jorgensen, “and we need to make sure education is at the top of that priority list.”

Wynn struck back, explaining that the cuts were necessary to balance the budget.

Health Insurance

Both candidates favored affordable health care for Wisconsinites. They differed on how the federal Affordable Care Act was pushed aside by Gov. Scott Walker until after the Nov. 6 election.

“I do support that we take our time and do it right,” said Wynn.  He cautioned against passing the bill too fast and not keeping the “good parts” such as coverage with pre-existing conditions.

Jorgensen said the Affordable Care Act had been pushed back. “That’s not taking your time,” said Jorgensen.

Collective Bargaining

On collective bargaining, Jorgensen explained his experience as a Janesville General Motors plant union worker. He said collective bargaining is just talks with owners for better pay, benefits, and working rights.

Wynn said he believes workers should have a right to join a union, but should not have to. Wynn said “we never take that contract back to the owner” in state legislature because the public is the owner.

Voter I.D. Law

On an issue that hits closer to home from a timing standpoint, voter I.D. legislation has been held off by a Dane County judge.

Wynn stood for supporting the legislation, citing his experience in Iraq and the right to vote. “I do believe that you have to prove who you are to be able to vote,” said Wynn, noting that Jorgensen voted for an earlier version of a voter I.D. law on 2007.

Jorgensen stated that the 2007 version was “a much different bill.” He said the more recent version is too extreme and disenfranchises some voters. “Let’s do it right,” said Jorgensen.

Unions – WEAC

The Wisconsin Education Association Council, presented at the debate as Wisconsin’s largest special interest group, was selected as an example as to how unions have influenced past elections through large amounts of funding.

Jorgensen said to “get money out of politics,” while Wynn supported the way funds are used in political campaigns, recommending that voters go online to see where candidates are getting their money.

“We need openness, not restrictions,” said Wynn.

Bipartisanship and the Divide

When Gov. Scott Walker presented his budget bill in Madison that limited collective bargaining rights to public workers, the state was torn. The candidates were asked how they would handle the divide that’s driven Wisconsin apart.

Wynn told a story of Jorgensen screaming in the face of Rep. Stephen Nass on the Assembly floor. Wynn said he conducted himself as a professional, versus all the fighting and screaming.

Jorgensen, with no comments on Wynn’s story, said “I saw past the partisanship, I wanted to get that law passed. I’m honored to have been part of that, and to have done it together.”

Wynn agreed, saying “getting something done requires us all to work together.” However, he reminded the audience that we must put emotions aside.

Abortion

What would any debate be without a question on abortion? Not much, apparently.

Both Assemblymen agreed that abortion is a bad thing. The one huge difference in Jorgensen’s views is supporting Planned Parenthood.

In a similar subject, both Jorgensen and Wynn agree that adult stem cells can be used to achieve great things.

“This is something that, if it’s done responsibly and with a conscience, it can be something our state could be a leader on,” said Jorgensen.

Wynn agreed, saying that looking at the research, adult stem cell research can do great things for medicine. “It’s all in adult stem cell research, and the nice thing is that you don’t have to destroy a living human being to get to that point,” said Wynn.

Jefferson County Purchases Old Countryside Home Property

The Jefferson County Board approved a resolution to purchase a site for a new highway facility Tuesday evening. At a 19-9 vote with two absent, the board approved the $200,000 purchase of the 60-acre Old Countryside Home site on County Highway W.

The debate on whether to purchase the property has been ongoing for many years. The county could either buy the land and demolish the abandoned nursing home or use its nearby farm land for the highway facility. Costs to demolish the property are estimated at a minimum of $720,000 to $880,000.

A few board members raised concerns about the purchase of the site. Board member Jim Mode of the 20th District asked if the county should purchase the land and nursing home.

Carlton Zentner of the 26th District said “I’m not sure that building has to be destroyed. With 60 acres, there must be enough room to put up a highway shop of reduced size.”

County Board Chairman John Molinaro later said that Tuesday night’s discussion on the land purchase was short compared to recent weeks’ and that more work is ahead before building the highway facility.

The 2013 recommended Jefferson County budget was presented by County Administrator Gary R. Petre.

An almost $600,000 increase in the county’s share of general employees’ health plans, $462,000 in various county department projects, and $188,000 to support the operation of the Fair Park are among the recommended expenditures in the 2013 budget.

A proposed 0.5 percent increase in overall taxes is a result of .45 percent growth last year. Wisconsin state limitations restrict tax levy increases from surpassing that of the county’s growth rate.

In other developments:

  •       The board passed a resolution asking that online-only retailers collect and remit Wisconsin sales tax. The Jefferson County Administration and Rules Committee suggested that not collecting the sales tax gives online-only retailers an unfair advantage over traditional businesses and estimates a loss of $100 million to $200 million annually for the state.
  •       Due to frequent requests from members of the community, the Jefferson County Highway Committee recommended lowering the speed limit on County Trunk Highway J between Jefferson and Highway 89. The ordinance passed, allowing some portions of the road to be lowered to 35 mph from the current 55 mph. Other portions will be lowered to 45 mph.
  •       The County Board approved further spending under an emergency assistance program for flood victims. The program, called the Community Development Block Grant – Emergency Assistance Program, uses Wisconsin grants to disperse loans to flood victims.
  •       Two people were appointed to the Human Services Board. They are Jim Mode of Jefferson and James Schultz of Watertown. Both will serve a three-year term on the board.
  •       The County Board denied a dog damage claim to a woman who found 50 of her chickens killed by a rogue dog. She filed an $800 damage claim for the chickens.