Dry Economy

Dry Economy

By Jessica Jacobsen

The current drought isn’t effecting just the farmers here in the midwest. It’s also has economic effects are impacting the midwest economy.

An article from mycentralnebraska.com said that a survery of bankers suggest that the “economy is slowing down in rural areas of 10 Midwest and Western states as drought conditions bake the region.”

The article stated that the economic index dropped into “negative territory at 47.9 in June from May’s 56.7.”Any score in the economic index that is below 50 on the 1 to 100 score, means “contraction in the months ahead.”

The states (or part of the state) included in this survey are Nebraska, Iowa, Missouri, Kansas, Colorado, Wyoming, Minnesota, Illinois and the Dakotas.

The article also said, “The confidence index collapsed to 40.9 in June from May's strong 58.5. That suggests bankers aren't confident in the economy over the next six months.”

In a similar article on kotanow.com Ag Economist, Jessica Johnson at UNL Extension Center said “producers are definatly going to see lower prices than there used to be because the production is not there.” She also said that the “degree of the slump is still to be determined but the effects will be felt this year and next year.”

In the same article, Johnson stated that the best quality of farmers is their resilience. Many crop producers “have a great opportunity with crop insurance and a lot of them have that fall back to but it still does make times tough and it does make it hard for them.” She also pointed out that farmers have less crops and are selling off their cattle early and will likely see loss of seed production for the next crop as well.

Depending on what kind of farmer you are, you can be affected differently, says Johnson. Livestock producers usually suffer the effects of high-priced feed for their cattle and other livestock. This can affect the public as well. Prices for livestock products like meat and poultry can also go up.

Johnson stated different ways to help in this kind of disaster. Crop insurance for the crop producers, and supporting the decisions that our farmers make. The public can also help to conserve resources as well.

Johnson said that this drought is worse than the drought suffered in 2002.

“It is comparable to the 1930’s Dust Bowl.”

This is mainly because of how far it has geographically stretched.

She also said that a large drought like this is probably one of the worst disasters because of the long-lasting effects and that it affects people in more than one area.