US faces worst drought in 25 years, food prices to soar
PTI | Jul 20, 2012, 06.17AM IST
WASHINGTON: The US is facing its "worst drought" in 25 years that could fuel food price inflation as crop yields are hit, an Obama-administration official has warned.
As many as 61% of the land mass of the US is currently being characterized as being impacted by this drought, the agriculture secretary , Tom Vilsack, said on Wednesday, noting that this drought is having an impact in crops.
"Seventy-eight percent of the corn crop is now in an area designated as drought impacted; 77% of the soybeans that are being grown are also impacted.
It also involves other commodities — 38% of corn crop as of today is rated poor to very poor; 30 % of soybeans poor to very poor," he said, adding that there are indication of reduced yields this year. "This will result in increased prices. For corn, we've seen a 38% increase since June 1st, and the price of a bushel of corn is now at $7.88. A bushel of beans have risen by 24%," he said.
To help farmers, the federal government has decided to open up areas under the Conservation Reserve Programme for emergency haying and grazing, he added.
"Because livestock producers will begin reducing their herds in light of higher feed costs, we would anticipate in the short term food prices for beef, poultry, pork may go down a bit, but over time they will rise."