The forecast is dry and the outlook is grim for farmers in the Midwest corn and soybean belt from Iowa to Ohio. In fact, over 1,000 counties in 26 states are affected by the record heat and drought conditions. The latest information from the National Climatic Data Center revealed that the current drought is threatening about 55 percent of the United States, which is the highest percentage in over 56 years. Consequently, the USDA recently declared drought 2012 as the largest drought in this nation’s history.
What does the drought mean for the affected farmers and the rest of the United States?
The drought has a trickledown effect. Take corn, for example. Corn crops are among the most valuable crops in this nation. The latest reports indicate that only about 40 percent of corn crops this year are classified as good or excellent. This means that 60 percent of corn crops are considered poor to very poor or could be a total loss. Because corn crops have been negatively affected, this also affects:
- Farmers who have partially or completely lost their crops
- Beef producers that use corn to feed their livestock
- Consumers, as prices for corn and other foods increase
- The ethanol market, as ethanol is made with corn, increasing the price of fuel
The U.S. Agriculture Department declared that the 2012 drought could possibly have a far worse economic impact on the U.S. than the severe 1988 drought. Although farmers may be covered by insurance, losses and damages may be far reaching.
Because of the massive numbers of soybean and corn crops that have withered in the drought, experts are estimating that the corn and soybean losses will be about $40 billion. Although the final numbers are not in, this could be the largest insurance claim against the crop insurance program this nation has yet seen, translating into billions of dollars in insurance claims.
If you are a farmer affected by the drought, and you have never had to file a crop insurance claim, you may want to consider talking with and experienced insurance claim attorney at the Voss Law Firm at 888-614-7730 for a free consultation today. Because of the numerous claims that insurance companies will be receiving, our lawyers are recommending that you should contact your crop insurance agent early, as there will be a longer claims process due to more claims than ever before.