President Barack Obama, campaigning in Iowa today, will announce $170 million in government meat purchases and urge Congress to pass an agriculture bill that provides aid for farmers struck by drought, the White House said.
According to Bloomberg BusinessWeek, the buys of as much as $100 million of pork, $50 million of chicken, and $10 million each of lamb and catfish come on top of $30 million in assistance to farmers and ranchers struggling with the worst combination of heat and dryness since the 1950s, the administration said.
Obama is also directing the Defense Department to speed up purchases and freeze the meat for later use, the White House said in a statement. The administration said the buying will help farmers with sales as they are dealing with the effects of the drought and the government will get a better price on products than if they were bought later.
More than half the counties in the U.S. have been declared natural disaster areas by the Department of Agriculture, and 69 percent of the Midwest last week had moderate to exceptional drought, government data show. Corn prices have surged 60 percent since mid-June, reaching an all-time high of $8.49 a bushel on Aug. 10 on the Chicago Board of Trade.
In the short term, what’s bad for ranchers may be good for consumers. The increased sales of animals to slaughterhouses will boost beef supplies and slow price increases at the supermarket, Lapp said. The USDA last month lowered its forecast for beef-price inflation for 2012 half a percentage point to 3.5 percent to 4.5 percent. For 2013, the expectation is a gain of as much as 5 percent.
“Near term, there is an adequate supply of meat from all species,” Michael Martin, a spokesman for Minneapolis-based Cargill, said last week in an e-mail. “As we move into 2013, the supply of beef, in particular, could be constrained by the U.S. herd being the smallest in 60 years.”
Source: Bloomberg BusinessWeek