The Drought

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ancona

Praying Mantis
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I thought I would kick this around a little because.....well......shit like this can wreak havoc around the world. Anyhow, when I was scrolling around on this borrowed computer this morning [I grenaded my machine Sunday.......Damn it!] I couldn't help but notice how all the mainstream newsbots keep repeating the farm report mantra of 30% crop loss in soy and 29% crop loss in corn. All of the anecdotes I read on farmer blogs and in regional chat rooms indicates something far, far worse. The talk has shifted from one of cautious hope to desperation and crop insurance. Those who could afford to buy the insurance are praying that they actually get paid, since the whole idea is that if an insurance company has to pay out, it is only to a few farmers in a small area, not the entire midwest.

The tone of the insurance conversations is dire folks, since the worry is that the insurance companies could go broke, leaving the farmers to twist in the wind and go bankrupt.

This drought has been so severe that even if they do get the forecasted light rains this week, soil moisture is so low that most of it will simply run off. Have you ever seen this effect? I have. When dirt gets really, really dry, and you squirt water on it, the surface actually seems to repel water. Well, this is the thought about the coming light rains, way too little way too late. With temps forecast to remain up in record territory, we could be looking at some biblical shit this year in grains.

Of course our government had the brilliant foresight to sell off all of our strategic grain reserves because, well, drought and pestillence never happen.......right?
 
All of the anecdotes I read on farmer blogs and in regional chat rooms indicates something far, far worse. The talk has shifted from one of cautious hope to desperation and crop insurance. Those who could afford to buy the insurance are praying that they actually get paid, since the whole idea is that if an insurance company has to pay out, it is only to a few farmers in a small area, not the entire midwest.

The tone of the insurance conversations is dire folks, since the worry is that the insurance companies could go broke, leaving the farmers to twist in the wind and go bankrupt.

Having had a past life in the property/casualty insurance world, it actually gets a bit more complicated...
First layer: basic insurance company
Second layer: secondary reinsurance company (basically insurance for the insurance company)
Third layer: Government mandated pools of money that all insurance companies have to pay into that gets tapped to pay claims whenever an insurance goes belly up

If things got to bad, this drought could actually bankrupt a lot of insurance companies just like Katrina did, but the surviving companies will enjoy nice profits for the next few years due to less competition.
:wave:
 
As always: Someone's loss is somebody else's gain. In this case mine :snidely: and generally speaking the gain of central European farmers (France, Germany, Poland, Austria, Switzerland). I'm a shareholder in a medium sized farm (3000 hectares of Iowa type farmland) here in Europe. The summer over here has rather been normal to wet and crops on high quality farmland are expected to be higher than average. With grain prices 40% above last year "thanks" to the drought in the US and many parts of central Asia, central European farmers are looking forward to a very good season. Additionally fertilizer, seed and diesel prices have basicly stayed flat, so that's a bonus, too.
 
We're lucky here in the mountains. While there's not much dirt farming (it's mostly cows grazing) the amount there is seems to be doing just great - corn 7 ft tall and obviously healthy when I drive by. I haven't had to mow my lawn as many times this year, but that's about it.

Any damp air that blows over these mountains gets kicked up in altitude into the cooler stuff, and makes it rain more here. We just got two decently heavy rains.

It's when you concentrate farming in these huge factory blocks, not always in smart places (all those places that normally have water problems) that you get this. Shades of Rodale - he was right.
 
The corn looks fine in PA. We are not as bad as other states- via drought.
 
Of course our government had the brilliant foresight to sell off all of our strategic grain reserves because, well, drought and pestillence never happen.......right?

It also had the foresight to mandate burning our food for fuel.
 
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