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Farm Credit Newsroom

Impacts of Drought Conditions on Northeast Agriculture Producers

Enfield, Conn. — Farm Credit East, the largest lender to Northeast agriculture, released a report today indicating that the drought conditions will clearly create hardships for many Northeast farmers. 

“2012 has been a very challenging year for many farmers and the drought further compounds those challenges” said Jim Putnam, executive vice president for marketing and planning at Farm Credit East. “While the Northeast agriculture industry is very strong, we will likely see a significant reduction in net farm income as a result of drought conditions and the April freeze conditions that hurt most fruit farmers.” 

While the Northeast is considered to be in “moderate drought” by USDA standards, much of the Midwest is in moderate to extreme drought, the highest percentage since 1956.  As a result, the Northeast will surely feel the market effects of the Midwest drought. 

Cash crop producers that are able to harvest a good crop should be able to sell into a strong market. On the other hand, livestock and dairy farmers will experience high commodity prices leading to even higher feed costs. Farm milk prices may strengthen somewhat at the end of 2012 and going into 2013, but this increase will lag significantly behind feed price increases and the level of increase may not be adequate in the short term to cover feed cost increases. Furthermore, the hot, dry weather is resulting in decreased animal comfort and reduced weight gain/milk yield. 

The stress of the weather on vegetable crops is reducing yield and quality, although producers with irrigation will be able to reduce impact. Combined with the already devastating spring thaw/freeze damage on Northeast tree fruit crops, many fruit producers are continuing to suffer through the drought conditions. 

To view the full Farm Credit East Knowledge Exchange Report, Implications of 2012 Drought for Northeast Agriculture as of July 24, 2012, visit


Farm Credit East extends more than $4.35 billion in loans and has 19 local offices in its six-state service area. In addition to loans and leases, the organization also offers a full range of agriculturally specific financial services for businesses related to farming, horticulture, forestry and commercial fishing. Farm Credit East is governed by a 15-person board of directors. For more information, visit to

Robert A. Smith


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