Friday, August 3, 2012
Wither Goes the Corn?
One of the most under played news stories in the national media right now is the potential impact of the mid-western drought on food security in the United States. According to Forbes 75% of food on supermarket shelves has corn in it. Having already destroyed, stunted or delayed much of the corn crop, the heat is now working it's way on the soybean crop. The Agriculture Dept conservative estimate is that food prices will rise by 3-4% this year as a result.
However this is based on the current, incomplete assessment of the drought's impact on corn and other crops.This drought is a new phenomenon-- a global warming drought based on fundamental alteration of weather patterns. Already about one quarter of the country is in severe drought. Other estimates of potential price impacts range as high as 15% and the latent fear that eventually, for a time, the U.S. may become a net importer of food may play havoc with the crop futures market. Food inflation may undermine economic recovery.
The problem is magnified by the current rightest orientation of the House of Representatives, for whom no ideological stonewalling of reality is too great. The house is tampering with food security by undermining crop subsidies and cutting food stamps. If the extent of crop loss is no greater than currently envisioned we will skate by with the usual increase in hunger and misery for the poor. If the disaster proves epic while Congress runs in the other direction, by spring we may have food riots and demonstrations beginning in poor neighborhoods. If Romney is elected, having already shown his response to Occupy demonstrators as less than civil, and with his money ensconced abroad, expect the demonstrators to be crushed rather than placated. Wither goes the corn: to seeds of discontent.