Drought Response

The Lempert Report
August 25, 2022

Phil: Another report that just came out from CNN business, finds that nearly three quarters of US farmers say that this year's drought is hurting their harvest with significant crop income loss. And the story just goes on that, you know, farmers are really in a major issue, major problem for this year's crops.

Sally: Yes. Well, I mean, you know, as we know that they depend very much on the Colorado river and those reservoirs. Lake Mead is one of them that we've seen a lot in the news. And, you know, I think 37% of farmers said that they are plowing through and killing existing crops that won't reach maturity because of this drought. That is up from 24% last year. So we've gone from 24% to 37%. That's a big change.

Phil: It's a big change. And also, what they go on to say is for cattle and beef, once the market processes, the excess animals sent to slaughter and has a smaller breeding herd to operate, price increases go up and they're saying the price increase of beef is gonna go six to 12 months. And, you know, until we get climate control, if you would, we're gonna see these problems and we've gotta get more indoor farms to be able to handle the excess.

Sally: Yes. And I, you know, additionally, I was reading this morning about Yuma Arizona, and California's Imperial valley that those two places produce more than 90% of the country's winter leafy greens. So, there are predictions that we may be looking at some shortages when it comes to lettuce and broccoli. We're also looking at wheat shortages, which are high, are exported a lot to Italy for making pasta. So, we're gonna probably have to make some adjustments.

Phil: Absolutely. And, and we're just gonna see more and more shortages. Just to give you some example in the UK, there's a butter shortage because a chronic shortage of suitably qualified farm workers mustard in France because of the extreme weather and drought that have crushed the mustard seed supply, bread and Lebanon, because of the lack of wheat, exports from Ukraine tea in Pakistan, eggs in Australia. Oh and also the winter weather means fewer eggs are being laid by free range chicken. So what, you know, those happy go lucky chickens that you're paying two, three, $4 more for a carton, they're gonna have less of those and soba noodles in Japan are in a major shortage as well.