According to Vilsack, the Administration moved, earlier this summer, to quickly open conservation programs for emergency haying and grazing, lowered the interest rate for emergency loans, and, he stated, worked with crop insurance companies to provide more flexibility for farmers facing crop failures.
On Aug. 7, President Obama convened the White House Rural Council, and that body announced several measures the Administration will take to help drought-stricken producers.
• Provision of $30 million in additional funding to help producers to access water supplies and repair land;
• Increasing capacity for lending to small businesses, including farms and ranches; and
• Waiving of certain requirements on trucks, to get more drivers on the road in relief efforts.
The secretary underlined efforts by President Obama to keep abreast of the effects of the drought on farmers, but also noted, “While this is a difficult time for many producers, it’s important to understand that thanks to advances in farming technology, more diverse global markets, lower farm debt, and a stronger rural economy, farmers and ranchers are better prepared to face drought than in past years.”
Perhaps engaging in wishful thinking, Vilsack also said Americans should not see significant short-term food price increases or what he called “price spikes,” at the grocery store. Current estimates are that the drought could cause at least a 4 percent hike in food prices in 2013.
Vilsack said rises in commodity prices due to drought do not affect consumers at the grocery store, because 86 percent of food costs are for such items as transportation and energy. The secretary pointed out that raw farm commodities make up only about 14 percent of food prices. “In other words,” Vilsack stated, “if every commodity (whole beef cattle, bushels of corn, tons of butter, etc.) doubled in price tomorrow, food prices would increase by just 14 percent. And that won’t happen.”
Of course, the drought will cause displacement of vital commodity supplies, particularly corn, and that will affect the corn-based ethanol industry, livestock production, all of the manufacturing and food processing that makes use of King Corn, and ultimately, the export picture for American farmers.
While timely rains have aided soybeans this summer, corn producers are doing everything they can to alleviate the drought’s effects, and the USDA is doing what it can to help. No one can really predict how bad it will get, but few believe there will be much of a corn crop in what should have been a bin-busting year.
I’ll see ya.
An Iowa native, Peter Graham has been a rural newspaper editor for 39 years. He currently edits a twice-weekly paper in Western Iowa. You can contact him at (712) 642-2791 or news@missourivalley times.com