Tuesday, July 17, 2012

The Drought of 2012

Middle America is experiencing the worst drought since the 1950s, with losses estimated at $50 billion.

Which means a banner year for farmers in Maryland the the northeast, since we have had plenty of rain and expect bumper harvests. Good thing I live here instead of the midwest, since nothing depresses me like drought. It's also worth noting that even with the worst drought in 50 years, we don't expect that any Americans will go hungry as a result.
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leif said...

Notably, corn losses due to this drought will be higher this time due to subsidies that favor planting corn. At least $4B in corn subsidies was paid out in 2011. This makes planting corn pretty interesting, compared to other crops -- I discussed this with my cousin, a Minnesota farmer who largely has abandoned sunflowers, soy and wheat for the more lucrative corn.

Most certainly, last year's > $1B in corn crop insurance payments will be paid out double or more this year. Who pays for this? The national debt does, more or less, with payment in fiat money.

July 17, 2012 at 11:12 PM

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