WASHINGTON (MNI) – The following are excerpts from the transcript
of the press briefing by U.S. Agriculture Secretary Tom Vilsack
Wednesday at the White House:

“I did have an opportunity to visit with the President. He is very
well informed on the circumstances surrounding a very serious drought —
the most serious situation we’ve had probably in 25 years — across the
country. Sixty-one percent of the land mass of the United States is
currently being characterized as being impacted by this drought.

…

“There’s no question that this drought is having an impact on our
crops: 78 percent of the corn crop is now in an area designated as
drought impacted; 77 percent of the soybeans that are being grown in
this country also impacted. It also obviously involves other
commodities as well — 38 percent of our corn crop as of today is rated
poor to very poor; 30 percent of our soybeans poor to very poor.

“And this obviously will have an impact on the yields. Right now we
have indicated yields will be down about 20 bushels to the acre for corn
and about 3 bushels to the acre for beans. That may be adjusted upward
or downward as weather conditions dictate.

“This will result in significant increases in prices. For corn,
we’ve seen a 38 percent increase since June 1st, and the price of a
bushel of corn is now at $7.88. A bushel of beans have risen 24
percent.

…

“The question that a lot of folks are asking is what will the
impact be on food prices. Because livestock producers will begin the
process of potentially reducing their herds in light of higher feed
costs, we would anticipate in the short term actually food prices for
beef, poultry, pork may go down a bit, but over time they will rise. We
will probably see those higher prices later this year, first part of
next year. Processed foods obviously impacted by crop yields, and we
will likely see the increase of that also in 2013.

“It’s important to note that farmers only receive 14 cents of every
food dollar that goes through the grocery store, so even though prices
on commodities increase significantly, it doesn’t necessarily translate
into large increases for food prices. And if, in fact, people are
beginning to see food price increases now, it is not in any way, shape,
or form, related to the drought. And we should be very careful to keep
an eye on that to make sure that people do not take advantage of a very
difficult and painful situation.

“There is some degree of uncertainty about all of this. 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. As of today,
1,297 counties have been designated as Secretarial Disaster Areas.
That’s approximately a third of the counties in the United States.
We’re adding 39 counties today in eight states — those states are New
Mexico, Tennessee, Utah, Wyoming, Arkansas, Indiana, Georgia, and
Mississippi.”

** MNI Washington Bureau: 202-371-2121 **

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