US warns of higher crop prices from drought

The governor of Illinois has been to examine the ravages of the drought

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US Agriculture Secretary Tom Vilsack has warned the worst drought in decades will result in higher crop prices.

Mr Vilsack met President Barack Obama on Wednesday to discuss the US response to drought concerns, with little rain forecast to ease the crisis.

By the end of June, 55% of the continental US was in a moderate to extreme drought, officials reported.

Crops including corn and soybeans have been hit by the dry conditions, and several states have seen wildfires.

Mr Vilsack announced in a press conference on Wednesday that the US Department of Agriculture had added 39 counties in eight states as "natural disaster areas", making farmers in those counties eligible for low-cost emergency loans.

Almost 1,300 counties across 29 states have received the designation this year.

Price-gouging fears

Temperatures are expected to hit around 100F (37C) across much of the affected area, including Missouri, Iowa, Illinois, southern Minnesota, Nebraska and South Dakota.

Start Quote

If I had a rain prayer or a rain dance I could do, I would do it”

End Quote Tom Vilsack US Agriculture Secretary

Some rain is expected in parts of Ohio, Kentucky and eastern Indiana later in the week.

On Monday, the National Climatic Data Center reported that this year's drought is the most widespread since 1956.

In a press conference, Mr Vilsack said that while crop prices would likely rise, consumers would not see the effect immediately. He cautioned about potential price gouging in the coming months.

The intensity of the drought was not as great as one in 1988, he said, but much larger areas of the country are now affected.

Corn struggle to survive in a drought-stricken farm field near Uniontown, Kentucky 16 July 2012 A cornfield in parched Kentucky

"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 said.

"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."

"If I had a rain prayer or a rain dance I could do, I would do it," he added.

On Monday, a weekly US report said that just 31% of the corn crop and 34% of the soybean crop were in good to excellent shape.

The World Bank said that while it was "too early to be overly concerned" over the drought's impact on corn and soybeans, it was "monitoring the situation closely for potential impact on our clients".

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