Summer Drought May Clobber The Midwest

On the heels of the worst U.S. drought since the 1950s, long-range weather forecasts are showing that not only will the drought continue, it will intensify.

Consequences could be disastrous for farming and ranching communities across the Midwest — and lead to another spike in commodities prices should yields again suffer. The U.S. economy is still only starting to process last year’s drought. On the consumer side, recent government reports confirm that food prices have just begun to rise due to last year’s drought that — at its peak last September — covered nearly two-thirds of the country. Though hot weather and lack of rain caused futures prices for corn and soy to peak at new record highs last August, a lag in the country’s agroprocessing system means consumers — and therefore the broader economy — won’t feel the full brunt of higher supermarket prices for meat, dairy, and grains until later this year.

When combined with sequester-led austerity, the additional pressure of sharply higher food prices (rising at double the inflation rate) could put a strain on the economy in 2013.

Stock prices of ethanol producers (Archer Daniels Midland Co. (ADM) and Green Plains Renewable Energy Inc. (GPRE) ), dairy producers (like Dean Foods Co. (DF) ) and meat producers (like Tyson Foods Inc. (TSN), Smithfield Foods Inc. (SFD) , and Pilgrim’s Pride (PPC) ) may be impacted.

With the addition of new seasonal climate forecasts for March, there is significant cause for worry in the plains states where drought could even intensify beyond 2012 levels.

Why you should worry

Drought in the United States (well, anywhere on Earth for that matter) is driven primarily by three things these days: current conditions (including soil moisture, snowpack, and current vegetation health), climate variability (whims of atmospheric and oceanic circulation that change month to month), and climate change (which in addition to rising temperature and evaporation rates tends to favor more extreme episodes of rains and dry spells).

Right now, all three of those point in the direction of another severe drought year in 2013.

First, let’s look at the current conditions:

As skiers may have noticed, snowpack in California and Colorado is between 65-79% of normal right now, one of the worst western snow seasons in recent memory. In agricultural terms, what that means is rivers feeding major agricultural zones will start out with a big strike against them.

Also, despite a spate of recent midwestern blizzards, this winter’s precipitation across the vast majority of the country has only just kept up to normal levels or has fallen even further behind. Only tiny bits of Wisconsin, Michigan, and Ohio have managed to break their hold on last year’s drought. Current soil moisture conditions show a map full of red -- with dry conditions lingering over from last year.

Taking a look ahead using the newly released climate forecasts for March, the next few months of rainfall look increasingly meager.

The current consensus four-month forecast to June 2013 shows dry conditions inching eastward into the Ohio Valley from the Great Plains. Two months later, at least one model shows most of the country east of the Rockies mired in a deeply dry period, enough to intensify drought conditions to a point possibly exceeding 2012 levels.

These forecasts factor in all sorts of information about atmospheric and ocean circulations, and are generally the best tools that exist for long-range outlooks.

One additional factor — a surprise La Nina — may also be in the cards, which scientists have historically tied to increased odds of drought in the United States. Predictability for La Nina is near its cycle lows right now, but it’s still a point worth watching.

To top it all off, climate change shows no signs of releasing its stranglehold on the country’s weather in 2013.

Temperatures are forecasted to be warmer than normal every month as far out as our forecasts go — until at least May 2014. For this year’s critical summer months, the latest forecast shows above normal temperatures from Medford, Ore. to Miami, and from Death Valley to Downeast Maine. Corn basically shuts off its growth cycle above temperatures of 95F. So, if the lack of moisture won’t depress yields, the heat might. Drought also makes high temperatures more likely -- dry air warms quicker than moist air -- which in turn makes drought more likely. A vicious cycle that increases the odds for a drought repeat this year.

As a meteorologist, I try to find patterns in the data. In my work advising agricultural and livestock interests worldwide, I heard many stories last year about how forage for cattle was unavailable (for nearly any price) across big stretches of the Midwest.

The impact of a repeat drought (possibly the third year in a row for parts of Texas and Oklahoma) would place an exponentially greater amount of stress on livestock in areas where herd sizes have already been reduced simply due to lack of available feed. Even if rains were to return to normal for the coming few years, it would still take ranchers years to rebuild their herds from the harsh impact of the 2012 drought alone. A repeat would amount to sucker-punching farmers while they’re down. The patterns outlined above would be just that.

At least one state, South Dakota, is already openly fretting about what a repeat of last year would do to tax revenues and the state’s economy. During this fragile economic recovery, back-to-back disasters will have a much, much greater impact.

However, there’s some cause for hope: last month, the USDA released their annual outlook for the coming growing season, and forecasted record or near-record production of corn and soy — two of the crops hit hardest by last summer’s drought.

Their outlook says increased production will largely be driven by more acres being planted as farmers scramble to take advantage of high prices. Last year, the USDA took the rare step of allowing farmers to produce hay on land semi-permanently enrolled in the Conservation Reserve Program (which is designed to provide buffer land for wildlife and ecosystem health) in a last-ditch effort to compensate for drought-impacted low farm yields. Enrollment in that program is down again this year as farmers trade environmental protection subsidies for the chance to plant more corn and soy.

Looking at the latest seasonal climate forecasts for this summer, I think the USDA is being overly optimistic in their 2013 yield forecast. Their outlook seems to dismiss the chances for a repeat drought of similar severity to last year.