Drought could lead to higher grocery prices

While Phillips County is experiencing a cool spell, drought stricken California and other south western states (38% of the U.S.) will produce less agriculture products in 2014. It also means there will continue to be a beef cattle shortage as herds in those areas will shrink. Early estimates are that food prices may rise 3.5% or higher this year. People on fixed incomes and on the low end of the economic spectrum will be hit the hardest. However, all consumers and companies that are still grappling with a sluggish economic recovery will feel the pinch.

Large grocery chains have distribution networks and can import produce from around the world to keep customers in everything from cantaloupe to cauliflower, but experts say California's smaller yields will inevitably lead to higher consumer prices. California is the nation's largest producer of many fruits, vegetables and nuts and is also the largest dairy state. But with the traditional rainy season more than half over, farmers are making hard decisions about what crops to plant and how many acres to leave fallow. According to the California Farm Water Coalition an estimated 800,000 irrigable acres will be idled with 403,000 idled as a result of the U.S. Fish and Wildlife Service adherence to the Endangered Species Act in maintaining water in the Delta for the Delta smelt, a small minnow and state regulation regarding salmon. The current drought map by the National Oceanic and Atmospheric Administration looks similar to this map which is an outlook map through June 30, 2014. The link to the map is http://www.cpc.ncep.noaa.gov/.

Thousands of fruit and nut trees will die due to the lack of water. Additionally as productive acres shrink, wildlife, including feral hogs, will impact the remaining agricultural vegetation as their habitat dries out.

Globally, drought in Brazil, the world's largest producer of coffee, sugar and oranges, has increased coffee prices, while dry weather in Southeast Asia has boosted prices for cooking oil.

Swine Porcine Epidemic Diarrhea Virus

Rabobank has published a new report on the impact of the Porcine Epidemic Diarrhea Virus (PEDv) on the North American swine herd, forecasting significant impacts on production and harvest through 2015. In the report, published by the bank's Food & Agribusiness Research and Advisory team, Rabobank says that PEDv thus far has impacted about 60% of the U.S. breeding herd, 28% of the Mexican herd, and is beginning to develop in Canada. If PEDv spreads in Canada and Mexico at the pace seen in the U.S., Rabobank says that North American hog slaughter could decline by nearly 18.5 million hogs over 2013 and 2014, or 12.5% relative to 2013 levels. Overall U.S. pork production is anticipated to decline 6% to 7% in 2014, the most in more than 30 years.

The specific origin of PEDv in the U.S. has not been definitively identified but comparison of strains of PEDv in the U.S. has indicated a close relationship with strains in China. China has been shopping in the mid-west for the last few years, purchasing pigs and flying them back to China to improve their swine genetics. "It's as easy as something falling of a visitor shoe that gets the disease from one region of the world to another" explains Extension Agent Manoukian. It is clear that once the virus enters a region; it can spread quite easily and rapidly throughout an entire population. The PEDv has now been found in 27 states. The most common avenue is on livestock, farm equipment, and people that come into contact with hogs positive with PEDv or their feces.