Beef and grain, already under pressure in the United States, will be the hardest hit.

From Agriculture.com:

New reports from Brazil’s Parana state, a leading corn and soybean producing area in the southern part of the the country, say that the drought there is “worse-than-expected,” according to a Dow Jones Newswires story Monday. Parana is Brazil’s leading corn grower and second leading soybean producer.

“The western part of Parana, near the border with Paraguay, has been particularly affected,” says Agroconsult’s Fabio Meneghin. “I didn’t expect it to be so bad,” Meneghin said, based on a tour of the region.

Nestor Reinke, who farms about 75 hectares in the region, told the news service that he estimates losses of 40% in his corn and 60% in soybeans.

“We went about 45 days without rain,” Reinke said.

Drier conditions are expected to continue across southern Brazil, “which will maintain stress there on soybean growth,” MDA EarthSat Weather reported Monday. Rains are causing harvest delays in the northern part of the country, the weather service said.

Another South American source told Agriculture.com Marketing Talk members last week that the recent rains in Brazil thus far have been “unable to replenish soil moisture, which has large deficits.

It gets worse. From the Financial Times:

The drought sweeping swathes of South America’s prime farmland is really starting to bite in Argentina now as farmers count the cost of irrevocably lost crops.

Farmers themselves are looking at losses of $2.5bn – or $94 per hectare for soya and $167 per hectare for corn, according to this report in La Nación newspaper. El Cronista Comercial business paper reckons losses in export revenue for Argentina, one of the world’s major farm export nations, could be as much as $6bn.

Argentina typically sows a late corn and soya crop, but prospects for so-called “second corn” have been ruined by the lack of rain and “what there is now is all there will be,” Gastón Fernández Palma, president of the Argentine No-Till Farmers’ Association, told beyondbrics.

Argentina maximised yields and slashed costs by the “no-till” method, in which crops are sown on top of the stumps of earlier ones, such as wheat. But with much of the prime producing zone in the northwest of the province of Buenos Aires, south of Santa Fé and southeast Córdoba still parched and gasping for rain, “we’re getting right to the limit (for sowing)” Fernández Palma said of “second soya”. Mind you, he said “some farmers will still sow out of desperation”.

Farmers still have 1m hectares of second soya to sow, but “the longer they wait, the lower the yields will be,” echoed Armando Casalins, a technical advisor at the Grains Storage Federation. He reckoned Argentina’s corn harvest will now be 21m tonnes “and falling”, down from an estimated 28m, while soya production will be 3m to 4m tonnes lower than expected. Even the USDA’s latest soya estimate, 50.5m tonnes, may be hard to reach, farmers say.

“February is critical – it’s the month when the yields are defined in Argentina,” said one executive at a major multinational agricultural grains and oil producer, who asked not to be named. Though rains last week were patchy and mostly disappointing, good rainfall from now on could still salvage some production. “We started the year expecting 52m to 53m tonnes of soya and now, if the rains are good, we could see production of 49m. But no more,” he said. Paraguay is also looking at production of 5m tonnes, down from 7.5m; Brazil less than 70m, compared with 72m to 73m, and Uruguay some 300,000 tonnes less than its expected 2m, he added.

As I’ve blogged before, drought is also hurting American cattle herds and China is having problems with drought conditions hurting food production. In addition to the inflation caused by the Fed printing money these shortages will work in concert with high gas prices to make beef, corn and items with soy and corn by-products in them much more expensive. Texan rice farmers are also about to get hit hard as emergency drought measures are going to cut off the water they need to irrigate the crops:

Thousands of farmers in Texas’ rice-producing region are likely to be affected by action taken in response to one of the most severe droughts in state history. With water management agencies implementing emergency plans never used before, the Lower Colorado River Authority is widely expected to announce March 1 that it will not release water to rice farmers in three counties.

“This is the very first time this has happened,” Gertson said. “Rice irrigation was here before LCRA ever existed.”

Texas usually produces about 5 percent of the nation’s rice. Production also is dropping this year in the other five major rice-growing states, including No. 1 Arkansas, as farmers are pressed by rising production costs and dropping prices.

Gertson said he can grow about a third of his rice with groundwater. If he pushes it, he might get about 45 percent of the acres he normally plants.

England is also facing a severe drought that is destroying what little food is still grown there.

Stock up on on food now. I do much of my shopping at Costco and if you’re near a store that is similar joining saves you a lot of money.

It’s also not a bad time to start thinking about Urban Homesteading.

The media and the government are being coy about this but it looks like it’s terrorism related. From MSNBC:

A maintenance man cleaning out a newly vacant apartment in Jonesboro, Arkansas found 25 vials of E. coli bacteria in the refrigerator, according to reports.

The vials marked “E. coli” were in a foam box in the fridge at a Willow Creek Apartments unit, The Associated Press reported. After the facilities manager alerted authorities, an Arkansas National Guard hazardous material crew removed the bacteria.

The bacteria were determined to be medical grade, Fire Battalion Chief Marty Hamrick told the Jonesboro Sun.

While E. coli can cause diarrhea, urinary tract infections and pneumonia, officials determined there was not enough of a safety danger to evacuate the apartment complex, the AP reported.

The FBI is reportedly getting involved. KAIT8 spoke with a Arkansas State University assistant professor named Bill Payne who talked about the legitimate research uses for E. Coli which include testing antibiotics and using modified versions to clean heavy metals from contaminated water sources. However all these things need to be in controlled environments:

However, Payne said, there are few uses for the bacterium outside of a controlled environment.

“For a private citizen to have it, I can’t think of any reason why he would have it, and why you would keep it in the refrigerator is even more baffling because you just don’t keep bacteria in your refrigerator with your food. It’s a good way of getting your food contaminated.”

[…]

“A private citizen would find it very difficult to get that, and that’s mainly because of the problem that we have now with security bioterrorism agents.”

Funny he should mention that because these E. Coli farmers were not citizens:

A tenant recently moved out and apparently left the vials in the fridge.  Dunn said from what they understand the people that lived in the apartment were from outside the United States.

The authorities are floating some story about the E.Coli being used to treat heavy metal poisoning in the body. In an apartment. By people from outside the United States who they won’t identify. Sounds reasonable.

Don’t drink the water in Arkansas.