Econintersect: Drought conditions continued to exact increasing tolls on many 
sections of the country, while a few areas experienced rainfall sufficient to offer some relief. In many cases though, even places that received several inches of rainfall, precipitation has come too late to rescue crops long since burnt up. Since GEI News last reported on drought conditions (27 July 2012), just over 20% of the 48 contiguous states were in the grip of extreme or exceptional drought. Less than one month later, looking just at the crop growing areas, 49% of corn acreage and 46% of soybean acreage is in that category. Click on picture for larger image.
Below is the latest drought map available:
Click on map for larger image.
According to the Financial Times, crop damages in 2012 will total about $30 billion, if which about 40% of the loss will be born by growers directly. The ballance will be covered by crop insurance. The U.S. government will provide about $14 billion of indemnity and private insurers will cover about $4 billion, according to agricultural economists at the University of Illinois. Standard & Poors has estimated that private insurers will pay out a higher amount, $5 billion.
From the Current U.S. Drought Monitor as of 21 August 2012:
This U.S. Drought Monitor week saw a few notable improvements and some serious degradation. Temperatures have generally been below normal this week from the east side of the Rockies to the East Coast, with the exception of Texas, the Southeast Coast, and northern New England. This has helped ease drought impacts, particularly in those areas where beneficial precipitation fell. One such area is in the Ohio Valley where parts of Indiana saw more than five inches of rain. This is the second straight week of beneficial precipitation for some of these areas and this precipitation has largely alleviated Exceptional Drought (D4) from the state, despite lingering impacts still being felt. Last week, drought gripped slightly less of the agricultural land in the country with 85% of the U.S. corn crop, 83% of soybeans, 63% of hay, and 71% of cattle areas experiencing drought. Nearly half of the corn (49%) and soybean (46%) areas are experiencing Extreme (D3) to Exceptional (D4) Drought. This has led to both reduced yields and earlier harvests. Additional impacts this week include closing of an 11-mile stretch of the Mississippi River near Greenville, MS to barge traffic because of low water levels and wildfires expanding from northern California to Idaho.
One final note: As mentioned in the excerpt above, the drought has lowered water levels in the lower Missippi River so much that barge traffic has been shut down repeatedly over the past week. It has been closed again today (Sunday 26 August) and will remain closed for at least 12 hours tomorrow while channel dredging is done.
Click on pictures below for larger images and legends.
Sources:
- Insurers face big agricultural losses (Javier Blas and Alistair Gray, Financial Times, 26 August 2012)
- Current U.S. Drought Monitor (21 August 2012)
- July Heat is a Record! (GEI News, 8 August 2012)
- U.S. Drought Intensifies (GEI News, 27 July 2012)
- Miss. River closed again after barge runs aground (Associated Press, Fox News, 26 August 2012)
