First, everyone have a safe and Happy Thanksgiving. The drought monitor report as of Tuesday, Nov. 22 is a broken record. We are still in extreme drought and exceptional drought is creeping ever closer. The six to ten-day outlook (Nov. 28 to Dec. 2) indicates near normal temperatures and precipitation. The eight to 14-day outlook (Nov. 30 to Dec. 6) indicates normal up to a 40% chance of above normal temperatures and a 33 to 40% chance of below normal precipitation. Maybe the Thanksgiving weekend rain will pan out as after that things look pretty slim.
One of the hot topics across all forms of media is the increased cost of a Thanksgiving dinner. Actually, the increase in food costs has been a topic all year. Media throws out a reason or two as do politicians, especially prior to the last election. But what are the reasons your Thanksgiving feast is costing more? And while prices have gone up and it hurts, especially in lower and fixed income households, our food is much cheaper than in most countries.
• The price of energy – crude oil and natural gas. Prices have now dropped substantially for crude oil but it will take a while for those to filter down. This upshot is increased prices due to increased transportation costs and even for packaging made from plastic. It caused nitrogen fertilizer prices to more than double and while they have come down, they are still much higher than a year ago. And transportation costs affect all aspects of agricultural production. And with a shortage of available means of transporting goods, this has led to supply/demand issues.
• The overall costs of food production for producers also play a role. Increased prices for everything from fertilizer to pesticides and parts and equipment all play a role. Also, with a labor shortage across all sectors of ag from production to processing, increased labor costs play a role.
• The invasion of Ukraine by Russia caused huge disruption in grain and oilseed exports causing markets to spike. Ukraine is a major world supplier of corn, wheat, and vegetable oils. Not for us but for much of Africa, and other parts of the world.
• Strong demand worldwide for grains and oilseeds coupled with supply interruptions caused increased prices for feedstuffs. We tend to forget that ag commodities and things like oil are a global, not local market.
• Avian flu had a dramatic effect on poultry prices. Chicken supplies can ramp back up fairly easily, however, turkeys take longer.
• Weather has helped increase prices. Everything from severe drought and heat to floods and below normal temperatures.
• Another factor is a lack of competition in many parts of the agriculture sector, especially in meat and poultry. And it pays to remember there isn’t a great deal of competition among grocery chains.
• Finally, supply chains and production are still recovering from the effects of the pandemic.
Dr. Victor L. Martin is the agriculture instructor/coordinator for Barton Community College. He can be reached at 620-792-9207, ext. 207, or firstname.lastname@example.org.