Impact of the Drought on Corn Exports: Paying the Price

In the summer of 2012, weather conditions caused the most severe drought the United States has seen since the 1950s. This drought affected agricultural crops across the nation. As a result of drought-related crop damage, U.S. export prices for corn soared nearly 128 percent above the 20-year historical average, as measured by the Bureau of Labor Statistics (BLS) monthly export price index. Export prices also hit the highest level since the import and export price index series began in December 1984. Although weather conditions often wreak havoc on corn and secondary product price levels, this drought not only caused a spike in export corn prices, but has begun to influence U.S. trade for corn-derived products such as ethanol as well