How Huge Food Corporations Will Make Upcoming Food Price Hikes Even Worse
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Farmer George Naylor sounds a little too much like the fictional character Eeyore from Winnie the Pooh when I ask about his corn crop. June is usually a wet month, but not this year. One time it “rained” so little it just barely wet the bottom of his rain gauge. Add that to several days of triple-digit temperatures that accelerated evapotranspiration (water loss from his soil and his crop) and his corn is in a sad state. But he’s actually relatively lucky because he is in Iowa, which got some rain early in the season. Farmers in Illinois and Indiana are faring much worse.
The 2012 drought is now the worst drought our country has faced in half a century. As of the end of June, a third of the nation was in severe to extreme drought, and more than half faced moderate to extreme drought. All in all, June ranks as the 14 th warmest and 10 th driest June on record. By the end of July, the USDA had declared 1,584 counties in 32 states as primary disaster areas, making farmers and ranchers in those counties eligible for federal relief programs. Analogies to the Dust Bowl are becoming common.
Most of the time, Americans don’t need to worry much about how the food gets to our table and whether the weather has anything to do with it. It gets hot, and we put on the air conditioning. It doesn’t rain for weeks on end, and we celebrate the sunshine. But now, the fate of the corn crop on Midwestern farms even has comedian Stephen Colbert worried. Agricultural economist Bruce Babcock appeared on his show, warning him that the prices of meat, dairy and eggs will increase because “American livestock are fed a corn-heavy diet.” As Colbert put it, “It is one thing for global warming to make sea levels rise, but nobody told me it would make my cheese levels recede.”
Now is perhaps a good time to reflect on the extent to which the entire American food system is built on one crop – corn. And within that one crop, we rely on a very narrow range of genetics; although there are more than 250 known genetic races of corn, the U.S. almost exclusively relies on just two of them. Because the U.S. is the world’s number-one producer, consumer and exporter of corn, global food prices are also linked to America’s ability to grow corn. This year, we are going to find out what happens when the crop fails in many parts of the country. Now is a good time to ask ourselves: is it smart to bet the global food supply on a few varieties of one crop grown in one country?
Within the U.S., every state except for one (Alaska) grows corn, but the corn is concentrated geographically in the Midwest. Two states, Iowa and Illinois, grow more than 30 percent of America’s corn (measured by acreage). Add in three more states (Nebraska, Minnesota, and Indiana) and you’ve got nearly 60 percent of U.S. corn. Another six states (South Dakota, Kansas, Ohio, Missouri, Wisconsin, and Michigan) can also be considered major producers. These 11 states grow more than 80 percent of U.S. corn, mostly without irrigation, and right now half of them are severely suffering from the epic drought.
Where does all the corn go? Well, we aren’t eating it on the cob. Most of the crop is split between livestock feed and ethanol production with a smaller percentage going to exports and smaller amounts still going to produce foods we actually eat directly like high-fructose corn syrup. Over the past decade, we’ve seen a dramatic increase in the percent of the crop that goes to produce ethanol.