How the Drought of 2012 Will Make Your Food More Expensive

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Drought could reduce the U.S. corn harvest by 12%

They call drought the slow-motion disaster, and for good reason. While earthquakes and volcanoes strike in a moment, and hurricanes unfold over a few days, a drought is simply a day without rain that becomes two days without rain…and then a week…and then a month and then longer. The damage worsens by the hour, but it can take weeks or even months before the effects of drought become visible in cracked soil, stunted crops and dried up lakes. Even then, there’s none of the explosive drama that marks other natural disasters. Instead, there are days of sun and heat, a steady drying of the landscape, as if the all the water in the air and the soil were simply being sucked away.

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So while the drought of 2012 may not have generated the iconic images of Hurricane Katrina or Haiti earthquake, remember that was is happening right now to the heartland of the U.S. truly is historic. The National Climatic Data Center reports that 55% of the country is now in moderate to extreme drought, making this the biggest dry spell since 1956, and it already rivals some years from the Dust Bowl of the 1930s. The only thing that’s kept this drought from potentially becoming worse than the 1930s is that it is still relatively young—a “flash drought,” in the words of Climate Central’s Andrew Freedman—a fact that only underlines how intense the dry weather has been.

It’s been bad enough to potentially ruin much of the Midwest’s corn and soybean crop, with the U.S. Department of Agriculture (USDA) reporting this week that only 31% of the corn crop can be rated as good or excellent, down 9 percentage points from last week. As one scientist told the New Yorker‘s Elizabeth Kolbert this week, trying to farm in the caked-dry soil of usually fertile states like Indiana or Illinois is like “farming in Hell.”

And that’s where the more than 99% of Americans who aren’t farmers will begin to feel the impact of this drought. Corn is already above $7 a bushel, and soybeans—another major staple crop used for animal feed and fuel—aren’t far behind. So you might expect the corn on the cob at the local supermarket might get a little pricier. But of course the effects go far beyond the simple cost of an ear. Corn is the base of the American food pyramid, used in everything from meat—corn is a staple grain for chickens and cattle—to cereal to even Gatorade and Ring Dings. In his book The Omnivore’s Dilemma, Michael Pollan concisely quotes a food researcher who notes that Americans “look like corn chips on legs.”

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So if American corn gets more expensive—and unless the drought miraculously lifts, there’s every reason to expect it will—just about everything else on our table will as well, as Richard Volpe, an agricultural economist with the USDA, told CNN:

Corn is a major input for retail food. Corn is used to make feed for all the animals in our food supply chain. As this drought reduces the harvest of corn, that would drive up the price of feed for animals and then in turn meat products.

How big an impact more expensive corn will have on the family grocery bill isn’t clear. As Volpe goes on to note, it’s not a 1-to-1 relationship—a 50% increase in the price of field corn might raise the cost of food by 1%. That’s largely because for every $1 that an American spends on food, perhaps 14 to 15 cents of it actually goes to, well, food. Thanks to our highly artificial and subsidized diets, things like packaging, processing and advertising all take up more of the food dollar than simple field corn. Americans are insulated from the spikes in crop prices, both by marketing and by government subsidies. It also helps that even while corn prices are going up thanks to the drought, oil prices have fallen significantly over the past few months—sparing parched farmers greater expense and putting downward pressure on inflation.

The rest of the world, though, isn’t as lucky. In countries like Mexico or Kenya, where much of the population lives day by day and eats plain tortillas and bread, the cost of food really is the cost of food. So far we haven’t seen the kind of major food spikes that led to food riots in parts of the developing world in 2007 and 2008, but if a good chunk of the U.S. corn crop wilts in the field, the impact will likely be more severe overseas than it is in the U.S.—especially because America is far from the only country struggling with drought.

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As for farmers themselves, they’re already taking a hit—but the overall impact on the U.S. economy may turn out to be minor.  Farmers who depend on rain in much of the Midwest could face a ruined crop that would sink their season’s earnings. That in turn will impact the bottom line of companies like John Deere that sell to farmers. At the same time, however, agricultural incomes have been surprisingly high over the past couple of years, which should give many farmers a cushion. And those farmers fortune enough to live in areas that haven’t been crippled by the drought stand to benefit hugely from high crop prices. Overall, though, agriculture is a relatively small part of the overall national economy—just 1.2%—so while the drought won’t help the struggling economic recovery, it won’t sink it either.

But let’s be clear: if catastrophes like the drought of 2012 become more and more common, no economy will be immune. It’s too early to say for sure what role climate change may have played in this drought, and obviously the example of the Dust Bowl teaches us that extremely dry periods were hardly unknown in American history. But we do expect that as the climate continues to warm, extreme heat waves and prolonged dry spells are likely to become more intense in much of the world—including the western U.S. Already government scientists have said that climate change made the crippling Texas drought of 2011 some 20 times more likely. The drought of 2012 isn’t over yet—and it won’t be the last we’ll face.

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