Iowa Public Television

 

Fears of drought compound problem of increased oil prices

posted on March 10, 2000


FINITE RESOURCES LIKE OIL, AND MERCURIAL FACTORS, LIKE RAIN AND MARKET DEMAND, ARE THE DATA DEFINING THE FORTUNES OF RURAL AMERICA.

OILSEED AND GRAIN PRICES FOUND LIMITED SUPPORT FROM GOVERNMENT NUMBERS RELEASED FRIDAY. THE USDA SUPPLY/DEMAND REPORT SHOWS GLOBAL PRODUCTION AND USE ARE UP SLIGHTLY, WHILE ENDING STOCKS FOR WORLD OILSEED AND GRAINS ARE NOW PROJECTED TO FALL BELOW EARLIER ESTIMATES.

IN DIRECT CONTRAST TO GRAIN, OIL PRICES ARE HIGH. THE ELEVATED PRICES ARE PROJECTED TO INCREASE FUEL COSTS FOR FARMERS BY 23 PERCENT OVER LAST YEAR. IF OIL MAINTAINS ITS CURRENT PRICE INTO NEXT YEAR, COSTS WOULD INCREASE FOR FERTILIZERS AND OTHER PETROLEUM-BASED CHEMICALS AS WELL, PUTTING AN EVEN TIGHTER SQUEEZE ON AGRICULTURE PRODUCERS.

DRY CONDITIONS IN THE SOUTH ARE CAUSING FARMERS THERE TO CONSIDER SWITCHING FROM COTTON TO A CROP WITH A LOWER OVERHEAD LIKE SOYBEANS. BUT WITHOUT AMPLE IRRIGATION, OILSEED AND GRAIN CROPS WILL LIKELY SUFFER AS WELL.

THE LACK OF MOISTURE HAS DRIVEN SOME TO ACTION. IN AN EFFORT TO HELP MOTHER NATURE AND EASE DRY CONDITIONS, THE EDWARD'S AQUIFER AUTHORITY IN TEXAS HAS STARTED CLOUD-SEEDING MORE THAN A MONTH EARLY. MOISTURE DEFICIENCIES IN THE SOUTH ARE WIDESPREAD, MAKING THE HOPE OF AN ESTIMATED 15 PERCENT INCREASE IN RAINFALL FROM CLOUD-SEEDING AN ALLURING PROSPECT.

Tags: agriculture commodity prices drought news oil weather