Wednesday, August 1, 2012

Expect higher food prices this fall

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By FRANK PRIESTLEY

More than 1,300 counties in 26 states across the southern tier of the nation are now pegged as drought disaster areas with 75 percent of the U.S. corn and soybean crops affected. Consumers should expect increasing food prices this fall led by meat and milk. Economists predict a 3-5 percent increase on most grocery items. Corn and soybeans are key feed components for most livestock. Although farmers planted record acreage this spring, corn harvest could be off by 30 percent or more. This will bring about higher feed prices and cause price increases in chicken and pork at the grocery store.

Many beef producers who have lost pasture to drought and fire are expected to take calves to market earlier than normal. However, high feed prices take profit from the scenario for feedlot operators, which lends uncertainty to the cattle market. Liquidation of some herds is likely. Hog herd liquidation is also likely and heat stress has caused milk production to drop 15-20 percent nationally. Butterfat content is reduced by heat stress causing expected price increases for cheese and many other dairy products.

Idaho has avoided the worst of it with only five counties earning disaster declarations to date. They include Oneida, Bear Lake, Teton, Blaine and Clark. All of Utah and Nevada are experiencing severe drought while parts of Wyoming and Oregon are as well. In 1977, Idaho saw its worst drought year on record with nine counties declared as disaster areas. Wells in the Big and Little Wood river basins went dry in April 1977 and many shallow wells in western Idaho dried up in June of that year.

The main reason Idaho has been able to withstand this drought is the state came into the irrigation season with carryover supplies in its reservoirs. Idaho has never had a catastrophic crop failure due to drought. That's a rather amazing fact considering the biggest part of the state, where most of our crops are produced, is a desert. Dams that impound millions of acre feet of water provide Idaho with the water it needs to support its economy.

However, we need not lose sight of the fact that without adequate winter snowpack, Idaho could be facing severe drought next spring. Demand on Idaho's water supply continues to increase in direct correlation with population. Increasing demand for culinary water means decreasing supply for irrigation if storage remains static. It is a high priority for Idaho agriculture to increase water storage. We support increasing reservoir capacity, building new impoundments and especially increasing aquifer recharge efforts whenever excess water is available.

We understand there are environmental implications to building new dams and a major utility company in the state (Idaho Power) opposed Idaho's last serious attempt at aquifer recharge because it would have channeled excess water into the aquifer rather than through the company's turbines. This type of shortsighted policy-making at the state level needs to be corrected for Idaho to make the most of its water-storage capability and to ensure the sustainable growth of our cities and agricultural economy.

Frank Priestley is president of the Idaho Farm Bureau Federation.

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