Drought 2012

While wreaking havoc on grain crops, the worst U.S. drought in a half century is providing opportunities for companies that provide and pump the most precious of commodities — water. While the drought is testing farmers and food producers, the volatility in weather patterns is giving water companies new revenue sources, as they provide solutions to the environmental challenges.

Action in Washington, combined with the ongoing efforts by our agricultural experts to mitigate the effects of this drought will ensure that agriculture remains a strong pillar of the U.S. economy that provides good jobs and feeds the world.

As drought continues to affect most of the country, our thoughts and prayers are with the thousands of farm families who have been affected by this disaster. Today, USDA’s focus remains on doing all we can to support farm and ranch families in an uncertain time.

While the federal government is spending more on meat and fish, a relief package and a massive farm bill are still mired in Congress and unlikely to move before the presidential election.

Back home in Kansas we are spending our time looking up to the sky, praying and hoping for rain. Our state, along with much of the country, is suffering from a very serious drought. Crops are dying, cattle are hungry and being sold off, and water is in scarce supply.

From marine shop owners to the folks running lake shore businesses, two years with below average rain fall shows the drought is impacting more than just farmers and ranchers in central Texas.

While the crops and livestock of America’s farmers and ranchers are suffering, the U.S. will continue to have the safest, most affordable, most reliable food supply that the world has ever known because of our agriculture safety net.

The drought has been awful for farmers, but it could reap a bumper crop of good news for the seed business. With much of this year's corn harvest expected to be a disaster, analysts expect farmers to double down on seed purchases next year to get back on their feet.

As a result of a Congressional mandate passed in 2005 and expanded in 2007, over 40 percent of this year’s greatly depleted corn crop will be diverted from food and livestock, and instead be sold at the gas pump. We are trading our precious, fertile acres of farmland for a small dent in our oil usage. We are prioritizing our goal to reduce oil dependence over providing food to people.

As the U.S. drought continues and global grain prices soar, G20 leaders are considering an emergency meeting at the end of August to consider what measures to take to combat the growing food crisis.  But the surge in corn, soy and wheat prices could also lead to some benefits for the agricultural sector and an opportunity for investors, according to one fund manager.