Drought is putting strain on food, water, energy, and the places where they intersect. (Photo by Shutterstock.)

What a difference a year makes. Last spring, farmers along the Mississippi River watched in horror as the Army Corps of Engineers blew up levees to let floodwaters run into their fields in order to protect downriver cities (check out this NASA video of before and after LANDSAT photos). This year, farmers around the country are watching helplessly as drought causes widespread crop damage. In some places along the Mississippi River, water levels are 50 feet below last year’s near record high levels. Unfortunately for a country already struggling with a slow economy, damage caused by this drought is going to be expensive and could affect many parts of our lives. Our food, water, and energy systems are so intertwined that a crisis affecting any one of those resources can throw the others seriously out of balance.

As of June 2012, more than half of the country was in various stages of drought (according to information from the weekly U.S. Drought Monitor Report) and more than one-third of the nation’s counties had been declared federal disaster areasIn July, we didn’t get much relief, so that number is rising. Food, water, and energy come together to form an important nexus. We’re experiencing that nexus firsthand, because the worst drought since 1956 will likely produce significant impacts on food and fuel prices, and could cause urban water supplies in some regions of the country to dry up -- with staggering consequences.

Here’s how food, water, and energy are being impacted by the 2012 drought, and some tips to help you minimize the impacts of these higher prices on your budget.