Summary: Pursuant to a congressional request, GAO obtained information on the: (1) probability of normal wheat, corn, and soybean crops in 1989 following the 1989 drought; and (2) potential effects of a 15-percent decrease in corn and wheat production in 1989.
GAO found that: (1) during the summer of 1988, about 43 percent of the contiguous United States was affected by extreme drought; (2) in May 1989, the National Weather Service (NWS) identified several major wheat-producing states as having slightly to excessively low crop moisture levels, but also identified several major corn- and soybean-producing states as having favorably to abnormally high crop moisture levels; (3) difficulties in long-range weather forecasting preclude accurate estimates of 1989 crop production; (4) given low soil moisture levels, 1989 crops will be particularly dependent on precipitation throughout the growing season; (5) the Department of Agriculture (USDA) estimated that winter wheat production would decrease about 8 percent from 1988 levels; (6) USDA and state officials believe it is too early to estimate corn and soybean production; and (7) NWS forecast a high chance of below-median precipitation for large portions of major grain-producing states. GAO also found that, given a 15-percent reduction in production, total wheat and corn use would decrease by 11 and 10 percent, respectively, and wheat and corn prices would increase by 18 and 36 percent, respectively.
