The price for staples like corn and wheat continues to rise amid increased demand, but farmers' ability to cash in on the opportunity remains hampered, first due to COVID-19 shutdowns and now to hot, dry weather affecting their output. For instance, about 63 percent of the country's spring wheat crop is currently in "poor or very poor condition, versus 6 percent at this time last year," writes the Journal. Meanwhile, North Dakota, South Dakota, Minnesota, Iowa, and Nebraska all "contain areas of extreme drought," and North Dakota and Minnesota in particular are experiencing "near-record lows in soil moisture," per the Journal.
The USDA has consequently scaled back its expectations for U.S. crop production in 2021, and, in turn, domestic inventories are shrinking. "The impact of the drought is clear," said Chip Flory, leader of the western leg of the Pro Farmer Crop Tour. "There's no way around that."
It's not just harvests in the U.S. that are suffering — worldwide grain inventories are "dwindling," reports the Journal. Drought has impacted both corn production in Brazil and wheat production in Russia, with the soil moisture in Russian wheat-growing regions at its lowest levels in a decade, says Andrey Sizov, head of a Russian agricultural research firm. "This season, dry July weather and smaller wheat area numbers were a game-changer for the Russian crop," he said. Read more at The Wall Street Journal.