A few days ago I ran across the following statement from a reliable source about drought conditions in the United States in 2022: As of July 5, 44.3% of the U.S. and 49.42% of the lower 48 states are in drought.
The statement jogged my memory and sparked this week’s column about a few of the most notable and notorious droughts in the history of the United States.
The Great Drought Of 1954
From the American Meteorological Society entitled “The Prolonged 1954 Midwestern U.S. Heat Wave: Impacts and Responses” — The highest recorded temperature in Illinois, 117 degrees, occurred on July 14, 1954, in East St. Louis. This occurred in the midst of a widespread, long-lasting heat wave covering significant parts of 11 states, from eastern Colorado through Kansas, Oklahoma, part of Texas, Missouri, Arkansas, southern Illinois and extending to western Tennessee, Alabama, Georgia and parts of the Carolinas.
According to historical climate data, this event ranked as one of the top five extended periods of heat in these states since 1895. No such prolonged heat wave has occurred in the Midwest since 1954.
It stands to reason that since prolonged widespread heat waves have occurred in the last 100 years, there is a distinct possibility that they will occur again, and reviewing past impacts could help us plan for future events.
Corn yields in particular were heavily impacted by the extreme temperatures throughout the central Midwest, based on data obtained from the National Agricultural Statistics Service.
The Great Drought Of 1988
From WGN-TV by Tom Skilling from July 20, 2018, with a title, “The Drought of 1988 Was The Worst Since the Dust Bowl” — Do you remember 1988? It was a year of horrendous drought and summer heat in Illinois and across much of our country.
This summer marks the 30th anniversary of the infamous drought of 1988, one of this country’s worst natural disasters and the costliest U.S. drought in history and easily the worst drought since the Dust Bowl back in the 1930s.
At one point, 45% of the lower 48 states was in a state of extreme drought and 11 states declared all of their counties disaster areas. The heat which accompanied the drought is believed to have cost the lives of 5,000 to 10,000 in this country, and its impact on our region’s farmers was devastating, slashing corn yields by a staggering 44%.
The Great Drought Of 2012
From The Atlantic.com on Aug. 12, 2012, with a headline, “The Drought of 2012″ — During the summer of 2012, the United States experienced its worst drought in more than half a century. The Mississippi River was approaching record lows, as far as 20 feet below normal.
Throughout the Midwest, meager corn harvests began on some of the earliest dates ever recorded. Corn and soybean farms were producing far smaller yields this year, which would affect livestock production and impact food prices worldwide, especially in developing nations, where even a small rise in the cost of grains can be devastating.
The Summer Of 2022
The weather forecast for the Grain Belt since mid-June has been threatening. However, the Fed hiked rates three-quarters of a point on June 15 and grains and all other markets have gone lower, not higher.
In fact, the highlight of this summer, thus far, is the fierce battle underway between the Fed and other central banks hiking rates and spawning a recession which is bearish and hot and dry weather which is bullish.
However, history shows that Mother Nature trumps the Fed. As a result, I am convinced the key to grain prices moving forward is the weather pure and simple.
But I am also convinced the Fed will hike rates as much as a full percentage point before this month is over. If so, the battle between Mother Nature and the Fed will intensify.
It can be etched in stone that a corn crop is made or broken in July and a soybean crop in August. The corn crop pollinates in July and a soybean crop flowers in August.
Above-normal temperatures and below-normal rainfall during the key months of the growing season can send yields and production collapsing and prices of all grains skyrocketing upward.
In fact, this year’s ending supplies of all grains are razor-thin and a shortfall with grain production in the United States, Europe or Argentina could send prices to nosebleed levels.
The weather forecast I am viewing here in mid-July is the most threatening I can recall since the Great Drought of 1988. But as Mother Nature is attempting to push grain prices higher, the Fed is battling back.
Stay tuned to see who wins!