The Real Cost of a Sweltering Summer

By Lewis Braham - 2012-07-19T00:21:34Z

Photograph by Scott Olson/Getty Images

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Crop loss

Corn is the biggest U.S. crop, valued at $76.5 billion in 2011. On July 11, a month after predicting a record domestic corn harvest, the U.S. government cut its outlook by 12 percent. As the drought expanded, corn prices surged more than 50 percent from mid-June through mid-July. That may impact consumers. Sanderson Farms, a major U.S. poultry producer, said every 10 cent corn increase boosts their costs by $21.2 million. While it's using mostly cheaper inventories to feed flocks, costs will likely rise in September when it plans to expand output, Chief Financial Officer Mike Cockrell said. "When we get to the fall and we're facing higher grain costs, chicken prices will have to move accordingly."