DULLES, Va. (9/11/12)--Many communities continue to struggle with one of the worst droughts to hit the U.S. in more than 50 years, and you don't have to be a farmer, rancher, or small-business owner to feel the effects. Your grocery budget could derail quickly unless you take steps to drought-proof it now.
Expect scorched corn and soy crops to bump up the cost of meat, soft drinks, fast food and processed food well into 2013 (Huffington Post
Aug. 16). Corn and soy and their byproducts--pervasive in processed food--are in about one of four food items, including hot dogs, packaged cake mixes, margarine, and frozen yogurt.
To save money, cut back on processed food. Consider switching to organic for some foods. Organic fields out-produce conventional ones during droughts, according to a 30-year farming study by Rodale Institute. Buy fresh food locally to reduce shipping and storage costs, which are passed along to you at the grocery store.
Also, be aware of energy ratios, further price drivers. Chicken meat production, for example, consumes energy in a 4:1 ratio to protein output. In contrast, beef cattle production requires an energy input to protein output ratio of 54:1. Raising broiler chickens requires 3,500 liters of water to produce a kilogram of meat, compared with 2,000 liters for soybean production, 1,912 liters for rice, 900 liters for wheat, and just 500 liters for potatoes.
Farmers and affected small businesses can seek drought assistance to help with recovery:
Credit unions: Last month President Barack Obama announced a relief package that included a provision to increase lending to small farmers and other businesses affected by the drought. The package designates roughly 1,000 of the nation's 7,200 credit unions as low-income credit unions, exempt from federal caps on small business lending, provided they opt-in.
U.S. Department of Agriculture: For 2012 drought disaster updates, including a drought disaster designation map depicting the status of each county in the U.S., visit USDA's Drought and Disaster Assistance site (use the resource link). If your county is affected, you may qualify for emergency loans.
Farm Aid grants to farmers: The Family Farm Disaster Fund provides relief for farm families whose crops and farmland are being devastated by the drought. Call Farm Aid at 800-FARM-AID or visit the Farm Aid website. (Use the link).
U.S. Small Business Administration Drought Disaster Assistance: Small nonfarm businesses, small agricultural cooperatives, small businesses engaged in aquaculture, and most private nonprofit organizations of any size that have been affected by the 2012 drought may qualify for Economic Injury Disaster Loans to help cover qualifying operating expenses. The interest rate is 4% for businesses and 3% for nonprofits, with terms up to 30 years. Businesses primarily engaged in farming or ranching are not eligible. Visit the SBA link for more information.
USDA Disaster and Drought Assistance: Find information about emergency loans, haying and grazing, frequently asked questions about crop insurance, and more at usda.gov/drought.
USDA Food Aid Disaster Assistance: Find information about food banks, state offices of emergency management, Supplemental Nutrition Assistance Programs (SNAP) in your state, and more. Use the link.
Cooerative Extension Service: Your county and state extension offices have drought resources. Visit the link and click on your state and county.
For more information, listen to "Are You Prepared to Survive a Disaster?" in the Home & Family Finance Resource Center.