USDA’s Vilsack warns on food prices, prays for rain

U.S. Agriculture Secretary Tom Vilsack said he was on his knees every day, praying for rain in the Midwest, where a prolonged drought is withering crops in the fields and will likely push up food prices later this year and next.

Vilsack urged Congress to work with the Obama administration to improve aid to farmers who are struggling with a crop that will be sharply reduced by searing heat and a lack of rain, which are affecting 61 per cent of the U.S. land mass.

"I get on my knees everyday and I’m saying an extra prayer right now," Vilsack told a White House briefing with reporters. "If I had a rain prayer or a rain dance I could do, I would do it."

Vilsack said higher feed costs would likely boost meat and poultry prices later this year and next, although they could drop in the short term as producers slaughter cattle because of high costs, temporarily raising meat supply.

He said the USDA would open up more areas in the Conservation Reserve Program to give ranchers access to emergency grazing land.

Hard-hit livestock producers and other groups want the U.S. Environmental Protection Agency to give oil refiners a waiver from the mandate to blend ethanol into gasoline, arguing demand for the corn-based fuel was driving up corn prices.

But Vilsack said ethanol demand was not a problem right now.

"There is no need to go to the EPA at this time based on the quantity of ethanol that is in storage," he told a White House briefing.

Vilsack said the drought was not yet as severe as the 1988 weather disaster in the Midwest which caused billions of dollars of damage.

"Part of the problem we’re facing is that weather conditions were so good at the beginning of the season that farmers got in the field early, and as a result this drought comes at a very difficult and painful time in their ability to have their crops have good yield," he said.

Vilsack said an additional 39 counties were designated as primary natural disaster areas for a total of 1,297 counties across 29 states.

— Russ Blinch is Reuters’ editor in charge of commodities and energy in Washington, D.C.


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