US drought may be peaking: US Farm Secretary

CHICAGO: The severity of the worst US drought in 56 years may be peaking, while its effects on corn and soya beans, the nation's two biggest crops, may not be known until the harvests, Agriculture Secretary Tom Vilsack said.

The steadying of weather conditions may limit food inflation next year, which the US Department of Agriculture predicted last month would be 3% to 4 %, Vilsack said in an interview at the Iowa State Fair in Des Moines. It may also ease pressure to relax federal requirements for the use of corn to make ethanol, he said.

"The overall impact of the drought is beginning to decline," Vilsack said. The uneven effects of the persistent dryness, which vary from farm to farm, make any crop predictions difficult, he said. "I'm not sure we know all we need to know to understand what's happening with this crop."

The condition of the soya bean crop improved last week for the first time this year, and corn's good-to-excellent ratings steadied at 23%, as rain and cooler temperatures reduced plant stress, the USDA said this week. The drought in states excluding Alaska and Hawaii eased last week to 61.8% from 62.5%, with improvement in all categories of severity except for the worst, the US Drought Monitor reported.

Drought conditions will persist in much of the Corn Belt and Great Plains states through November, the National Oceanic and Atmospheric Administration said in a report.

Lower temperatures and rain forecast for parts of the Midwest won't be enough to snap the drought that has pushed crop prices up for months, said Joel Widenor, co-founder of Commodity Weather Group in Bethesda, Maryland, this week.

Corn futures traded in Chicago have surged 60% since mid-June, closing on Friday at $8.075 a bushel, while soya beans have jumped 24%, prompting the United Nations to predict higher global food costs.