High Corn Prices Ripple Through the Economy

No rain, no corn. No corn, no cattle. Then the job losses begin
Corn plants stand in a field during harvest in Le Roy, Ill. Photograph by Daniel Acker/Bloomberg

According to Deutsche Bank’s chief economist Joseph LaVorgna, the drought last summer sapped about one percentage point of growth from the U.S. economy in 2012. Although the photos of withered crops and sun-baked fields have largely disappeared, the worst drought since the 1930s remains. Its latest casualty is one of the largest beef processing plants in the country: Cargill’s Plainview (Tex.) facility, which handled about 4 percent of all the cattle slaughtered in the U.S., was expected to shut down on Feb. 1. Shrinking cattle herds made the plant unnecessary, and most of the 2,000 workers there will lose their jobs. Cargill is helping workers find jobs at its other plants and other companies.

To continue reading this article you must be a Bloomberg Professional Service Subscriber.