The U.S. is suffering one of the worst droughts in recent memory, but farmers are going to be making record profits thanks to higher prices on food and government subsidies.
The Financial TImes reports:
US farmers are heading for their most profitable year on record despite the worst drought in half a century as high grain prices and payouts from a federal crop insurance programme compensate for a smaller harvest.
Net farm income will reach $122.2bn in 2012, the highest-ever nominal profit and the second highest in inflation-adjusted terms after 1973, the US Department of Agriculture said in its first forecast since drought spread across the corn belt.
Intense summer heat and dry soils dramatically worsened the outlook for this year’s US corn and soyabean harvest, propelling prices to all-time highs. Farms in northern plains states that escaped the worst conditions, such as North Dakota, will earn 39 per cent more this year, the department said.