Drought `98
a first person report
The scorching southern sun has been brutal to man, machine, crop, and animal alike. The problems are that this drought is not limited to the normally hot south and has started before the start of summer. Reports of heat indexes in the Dallas Fort Worth area above the dreaded 120 mark have become commonplace, with the Houston area topping 130. The power supplier in the DFW area says at least for the time being there will be no brownouts as they can purchase power from other area electric producers though the price will be higher as the lows for natural gas are past. Friends, this is only early June.
Every year in the south poultry producers suffer losses to the heat but this is the first year in recent history when there has been a greater than 5% loss prior to the middle of June. Chicken, egg, and turkey prices in most southern areas have already been affected, with some restaurants having downgraded egg size to maintain highly competitive breakfast prices. The assistant manager of a fast food place stated that their chicken breast filet would be cropped in size after existing stock was exhausted and noted that his non-franchised competition had boosted prices.
Coffee at a small feed & convenience store in Everman reveals complaints about hay prices from a small dairy producer and the farm girl behind the counter tells him they can only pass on their price increases. John, the smalltime dairyman, can only pass on the increases to the middleman. Corn prices are also trending higher, and the milk produced is of a lower butter fat content. All dairy products with a high butter fat content are more expensive across the entire country.
Traveling northeast on 87 through the heart of cotton country, I could not help but notice the fields which should by now have been white with cotton were baked bare. The topic at every coffee shop was the fear of the cotton farmer. The people of this area are among the most agreeable in the world, but now the tension is so thick a stranger can barely start-up a conversation. Newer and more deeply indebted farmers are beating the rush and giving up now, so as to assure top prices for their equipment and land; the farm auctions have begun. The AM talk station KGNC Amarillo reports that Texas A&M extension agents are seeing a greater than 80% cotton crop loss and speculates that this fall we will see inflation. The terror in the faces of the local cotton farmers tells better how bad the crop will be and how high the prices could go for the few with a "decent" crop. Rain at this point will not even mitigate the damage, this year's
crop is lost!
The corner of New Mexico and Colorado found other bad reports. The combination of drought,
new imported disease, and pesticide have killed as much as 70% of the wild (bumble) and honey bee populations. This year the honey production will be $.75-1.25 higher per pound. This will also drive a far higher price of melon and other truck crops as pollination will not be done by bees.
Early returns from California report a 30-50% lower prune crop, and though this year's citrus crop is history, fires in Florida have caused some leaf roll & production is expected to be somewhat lower this winter..
It has long been written that every ill wind blows someone some good. This heat wave is blowing that good into the hands of wrecker drivers. Heat related auto breakdowns in Lubbock caused a shortage of auto recovery, and with it a higher price.
If there is good news, it can be found in the wheat, soy bean, and beet crops. Beans appear to be
about on average. Current wheat crop is in good shape, ready for the combine. Rains at this point
could reduce the returns as fields could be to muddy for the machines to operate. Beets appear above far average!
Price inflation has been deigned by our government in recent years by a complex formulary known as the rule of substitution. This rule of substitution states that whenever the price of any basic commodity increases if there is an offsetting lower price in a like used commodity the consumer will use it instead, thereby having no noticeable inflation. Examples would be that if wheat is expensive, people will eat corn bread instead.
We will substitute beans & beats for corn in animal feed, white beet sugar for honey, and can get our vitamin C from ascorbic acid vs citrus; but there is no substitute for cotton. Texas produces as much as 60% of the world's cotton harvest. Barring the unforseen, we will see inflation. We must prepare for it or suffer from it.
cR Harmon 1998.
|
