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The Drought of 2012 revisited

Explore how the 2012 drought affected corn supply, leading to significant losses for crop and animal farmers. Learn how the drought changed farm operations, impacted feed costs, and influenced market dynamics. Discover key points and future implications for the agricultural industry.

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The Drought of 2012 revisited

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  1. The Drought of 2012revisited AG BM 102

  2. Corn Supply(Bil. Bu.) Source: USDA

  3. Corn Usage (bil. bu) Source: USDA

  4. Food and Industrial Corn Usemil. bu. Source: USDA

  5. Corn Usage

  6. December Corn Contract August 23

  7. Effect of 2012 Drought on Farmers • Crop farmers • Without crop insurance huge losses • Animal farmers • Major inputs much more expensive • Cow-calf operators – lack of grass extremely serious – western plains • Although animal prices will rise, not immediately – asset fixity • Generally losses esp. for those buying lots of feed (California dairy farmers)

  8. 2013 Crop • Corn & soybeans much lower – much bigger crops • Dry weather in western Corn Belt an issue • Also wet weather in South

  9. Some important points • Farm prices are MUCH more volatile than retail prices! • Consumers can adjust their consumption easier than a farmer can adjust a feed ration • It is a global market for most agproducts • Drought induced Brazil to raise corn – in future US share will be smaller

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