Posted: Aug 1, 2012 4:01 PM by Martin Sutovsky
Updated: Aug 2, 2012 2:26 AM
COLUMBIA - A new report released Wednesday from Creighton University in Nebraska showed a nine point drop in the Midwest's overall economic index from June to July. The index score plunged from 57.2 in June to 48.7 in July. Any score under 50 suggests economic decline. This was the first time the overall score fell below 50 since 2008.
The study surveyed business leaders and managers and gathered a collection of index scores ranging from zero to 100 in various areas such as cost of raw materials, the business confidence index, and the export reading.
Factors such as Europe's economic debt and the United States' struggling economy already negatively impacted the Midwest's economic health before the summer drought hit.
The drought, combined with lower amounts of exports, has hurt the agricultural economy, a driving force in the region's overall economic health.
Pat Westhoff, University of Missouri Program Director for FAPRI (Food and Agricultural Policy Research Institute), said Missouri in particular is struggling.
"In term's of this year's agricultural situation it's probably worse because here in Missouri we have some of the lowest rated crops in the country right now. We have more of our crop rated in poor or very poor condition than almost any other major agricultural state," said Westhoff.
Poor crop yields have already resulted in skyrocketing food prices, and that trend could continue.
Said Westhoff, "It's certainly possible this year that the price effects that we are already seeing will continue for some months to come. Prices have already gone up very sharply in anticipation of a short crop this year."
The drought has had a heavy impact on the crops of corn and soybean farmers. Livestock farmers have also been just as hard if not harder. Westhoff said the quality of a farmer's crop insurance will go a long way toward determining how much farmers will feel the effects of the summer drought.