The exposed bottom of the Mississippi River near St. Louis, July 17, 2012. (Robert Ray/AP)
Agriculture Secretary Tom Vilsack warned Wednesday that the worst drought in 25 years would drive food prices up later this year and said the situation was bad enough to make him wish for divine intervention. He also warned consumers to be on the watch for food price gouging.
"I get on my knees every day, and I'm saying an extra prayer now," Vilsack told reporters during a rare appearance in the White House briefing room. "If I had a rain prayer, or rain dance, I could do, I would do it."
"But honestly right now the focus needs to be on working with Congress" to craft an aid package in some form for hard-hit farmers and livestock producers facing the prospects of failed crops and higher feed costs, he said. Vilsack did not put a price tag on such legislation, saying the full extent of the damage was not yet clear.While it's not as devastating—yet—as the 1988 drought, the current heat and lack of rain are "the most serious situation we've had, probably, in 25 years, across the country," Vilsack said. "Sixty-one percent of landmass of the United States is currently being characterized as being impacted by this drought."
Corn and soybeans have been affected, and will trigger "significant increases in prices" for both crops, with ripple effects up the supply chain, he said.
But, Vilsack warned, it won't happen immediately—and consumers should be on the lookout for possible price gouging, and push back if they feel they are being conned.
"Everybody knows there's a drought. And everybody knows it's severe. And everybody knows that the corn prices and bean prices have gone up and that impacts livestock producers in the long term," he said. "What folks don't know is it does take some time for those prices and that impact to be felt."
"We want to make sure people understand that now is not the time that they should see higher food costs. If there are going to be higher food costs, you would likely see them later in the year and in the first part of next year," he said.
"The most important thing right now is for consumers to be aware, and to keep an eye out, and to begin asking questions if they see a dramatic increase in hamburger costs or steak costs they should ask 'what's with this?'"
"And if someone says 'it's the drought' they should push back and say 'now wait a second, that's not the reason. We should actually, given that herds are being reduced, and potentially liquidated, we should actually be seeing a little lower cost right now," Vilsack said. "And that push-back may make a difference."
The drought could have other painful repercussions for the already weak economy. Vilsack said "the rural economy is one of the bright spots in the economy" — notably through record farm exports -- and underlined that one in 12 American jobs was connected to farming. "The most important thing is for Congress to take action to provide some direction, assistance, so that folks know what's going to happen, what kind of protection they're going to have," he said.