Texas drought hits beef, wheat

From Bloomberg:

The worst Texas drought in 44 years is damaging the state’s wheat crop and forcing ranchers to reduce cattle herds, as rising demand for U.S. food sends grain and meat prices higher.

Texas, the biggest U.S. cattle producer and second-largest winter-wheat grower, got just 4.7 inches (12 centimeters) of rain on average in the five months through February, the least for the period since 1967, State Climatologist John Nielsen- Gammon said. More than half the wheat fields and pastures were rated in poor or very poor condition on March 20.

Dry conditions extending to Oklahoma, Kansas and Colorado may cut crop yields in the U.S., the world’s largest exporter, as too much moisture threatens fields in North Dakota and in Canada. Wheat futures in Chicago are up 50 percent in the past year, after drought in Russia and floods in Australia hurt output and sent global food prices surging. Wholesale beef reached a record this week, and the U.S. cattle herd in January was the smallest since 1958. [...]

Cattle futures jumped 23 percent in the past year to $1.1335 a pound yesterday on the Chicago Mercantile Exchange, after touching a record $1.18 on March 9. Wholesale-beef prices are up 17 percent in the past year, touching $1.8905 a pound on March 22, the highest since at least January 2004, when USDA began its current price-tracking method. U.S. retail-beef prices were 9.4 percent higher in February than a year earlier, the USDA said last week.

The inflation train chugs on.