US drought worst in 25 years, food prices to rise

A drought scouring the farming heartlands of the US is the worst for 25 years and could drive up food prices, the Agriculture Secretary, Mr Tom Vilsack, said.

The US is the world’s biggest producer of corn and soyabeans, and yesterday’s warning came as some farmers warned they may be forced to harvest crops early to sell the stalks off cheaply as animal feed.

“I get on my knees every day and I’m saying an extra prayer now. If I had a rain prayer or a rain dance I could do, I would do it,” Mr Vilsack told reporters after briefing the President, Mr Barack Obama, on the crisis.

Mr Vilsack revealed that 78 per cent of US corn and 11 per cent of soyabean crops had been hit, and compared the situation to a 1988 drought that cut production by 20 per cent and cost the economy tens of billions of dollars.

“This will result in significant increases in prices for corn. We’ve seen a 38 per cent increase since June 1 in the price of a bushel of corn — it’s now $7.88. A bushel of beans has risen 24 per cent,” he said.

Mr Vilsack said the intensity of the drought was not as great as in 1988 but 61 per cent of the country is affected, a much larger area than 25 years ago.

“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,” he warned.

“As a result, this drought comes at a very difficult and painful time in terms of their ability to have their crops have good yields.”

The secretary said the Government had increased the number of territories designated as drought disaster zones, bringing the total to 1,297 counties in 29 States, where farmers will be eligible for assistance.

Mr Vilsack said Mr Obama had ordered that the interest rates on emergency loans for farmers be reduced and that emergency areas be opened up for livestock grazing and hay production as feed costs rise.

But he said consumer food prices should not rise immediately, since the costs from the farm door are a small proportion of a final supermarket bill, and in any case it will take a while for the crisis to reach store shelves.

“There is some degree of uncertainty about all of this,” he said.

“Technology has allowed us to have more drought-resistant crops. The spotty nature of drought, the spotty nature of rains can sometimes result in better yields than anticipated.

We’re just going to have to see.”