More than half of the U.S. has been declared to be a natural disaster area, and 69% of the Midwest is experiencing moderate to exceptional drought. As the corn crop dwindles, prices have jumped upwards of 60%, reaching a record high of $8.49/bu. on Aug. 10. As a result of this drought, more farmers and ranchers are culling their livestock to avoid paying the high feed prices.
While on the campaign trail earlier this week, President Barack Obama announced that the USDA will purchase $170 million worth of meat to assist farmers and ranchers struggling with the worst combination of heat and dryness since the 1950s, according to USDA.
The purchase includes pork, chicken, lamb and catfish. Noticeably absent is beef.
According to Bloomberg Businessweek, “Obama called for Congress to pass a five-year agriculture policy bill that the White House said would provide short-term relief and long-term certainty to farmers and ranchers. A livestock-assistance program in the current farm bill expired last year. The U.S. Senate and the House Agriculture Committee have approved bills to replace the current law which contain livestock relief provisions. House Republican leaders have not set a vote on their legislation. The House on Aug. 2 approved a $383 million stopgap measure to reinstate the livestock aid, while the Senate took no action. The current farm bill was passed in 2008 and expires in September.”
Additionally, according to CNN, "The Defense Department is reviewing its purchases of beef, pork and lamb to see if room can be made to buy more now and freeze them for later. The military already buys approximately 94 million lbs. of beef, 64 million lbs. of pork, and 500,000 lbs. of lamb each year. That food gets eaten by troops around the world, even in combat zones like Afghanistan."
Despite more cows being sold and a greater supply of beef in the market, consumers are seeing sticker shock when they purchase it at the grocery store. According to CNS News, “The average price of ground beef hit a record high in the U.S. in July, according to data released by the Bureau of Labor Statistics (BLS). The BLS has been tracking the average price of a pound of 100% ground beef since 1984.In July, it cost $3.085, up from $3.007 in June. Prior to June, the average cost of 100% ground beef in the U.S. had never topped $3.00.”
What do you think of the USDA’s meat purchase? Do you anticipate Congress passing the bill to provide relief to farmers and ranchers soon? If so, is it too little, too late?