If you’ve had any interaction with either grain farmers or livestock producers in the past few weeks, one of the first topics of conversation has been the worsening drought for much of the U.S. grain production area. With another round of 100 degree F temperatures and little/no rain predicted for this week it is a safe bet that everyone will continue to downgrade their yield expectations.

Of course in the livestock industry we’ve been watching the cost of production climb rapidly as grain prices have soared. As the yield declines, there is quite a bit of talk about the competition between ethanol and livestock for the limited bushels expected to be available.

One item that is just beginning to surface is the expected quality of the corn crop. In times of stress such as the weather is providing this year it is not uncommon to have aflatoxin issues in the corn that does make it to harvest. A publication on aflatoxins in corn from Iowa State University (http://www.extension.iastate.edu/Publications/PM1800.pdf) states that the prime conditions for aflatoxin production are warm August nights in a period of drought. OUCH!