Thursday, July 19, 2012

Vilsack warns drought will worsen, raise prices; organic stock get a double hit as pastures dry up

The worst drought in decades is getting worse and will mean higher food prices for consumers, Agriculture Secretary Tom Vilsack said at a briefing in the White House Press Room yesterday. He also said the suggestion of waivers from ethanol mandates on oil companies isn't necessary because it's not affecting the price of corn, as some farmers have suggested.

Vilsack said an additional 39 counties have been designated as primary natural disaster areas, raising the total to 1,297 in 29 states. Here is the list. Russ Blinch of Reuters reports. Vilsack urged Congress to work with the administration to improve aid to farmers, something the new Farm Bill could do. The House has stalled on voting on its version of the bill. Peter Baker of The New York Times reports. Vilsack said more than three-quarters of U.S. corn and soybean crops are in drought-affected areas, and more than one third of those are now rated poor to very poor.

Corn prices have risen to almost $8 a bushel, making it difficult for livestock producers to buy animal feed. This will likely cause the price of beef, poultry and pork to rise late this year or early next. Iowa Pork Producers Association President Bill Tentinger told The Gazette in Cedar Rapids that high corn prices would force many pork producers out of business, and the new Farm Bill would only help crop farmers, not livestock producers. Analysts predicted a 4 to 6 percent increase in beef prices pre-drought, but Hibah Yousuf of CNNMoney reports consumers could see 10 percent increases if the drought and high corn prices continue.

Meanwhile, Bob Meyer of Brownfield reports, "The drought presents a particular challenge for organic livestock and dairy producers. Organic standards require a portion of the ration to include pasture, and when pastures have dried up that is a problem. Another problem is while the price of conventional corn and soybeans hits record highs, the price of organic corn and soybeans is even higher." For Meyer's eight-minute audio interview with Harriet Behar, outreach coordinator for the Midwest Organic & Sustainable Education Service, click here.

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