February 2009

While drought isn't a sudden, headline-grabbing event, often its effects are felt more than most natural disasters. Global drought has a major impact on crops, fresh water and water tables, wildfire, power grid problems and disease to name a few.

Right now the US is looking at a tough spring drought and it's enveloping portions of the world with equally devastating effects.

Every year, drought takes $6-8 billion in US crops, except for 2002, when it hit $20-30 billion. With a major drought in our biggest food-producing state, look for prices to rise in numerous California-grown foods as its faces its worst drought in modern history.

For Texas – our biggest cattle state – should its drought persist, look for beef prices to plunge as farmers are forced to send their animals to market early. Then expect beef (and possibly milk) prices to soar as farmers are forced to replenish herds from scratch rather than from offspring.

Here's a look at the US current drought situation, 3-month forecast and current global drought.