The U.S. Drought Is Hitting Harder Than Most Realize

Although it may be winter and people may have lost sight of the drought situation that ravaged most of the country throughout the year and especially the summer, it still continues.

Just take a look at most of the country today and what is missing....snow.  I live in Michigan and we are finally waiting for our first meaningful snowfall this Friday.  Snow is a very critical component of our water supply system.  And personally, if it is going to be snow, we would like to have some snow to go with it.

Chris Martenson PhD, writes an update on this subject in the Financial Sense here.  As Martenson highlights in his piece, lack of water has an impact of many more items that grain prices alone.

• Even though the mainstream media seems to have lost some interest in the drought, we should keep it front and center in our minds, as it has already led to sharply higher grain prices, increased gasoline costs (via the pass-through of higher ethanol costs), impeded oil and gas drilling activity in some areas (due to a lack of water), caused the shutdown of a few operating electricity plants, temporarily reduced red meat prices (but will also make them climb sharply later) as cattle are dumped in response to feed- and pasture-management concerns, and blocked and/or reduced shipping on the Mississippi River. All this and there's also a strong chance that today's drought will negatively impact next year's Winter wheat harvest, unless a lot of rain starts falling soon.