WASHINGTON (Reuters) - U.S. Agriculture Secretary Tom Vilsack said the worsening Midwest drought will result in sharply higher crop prices but maintained there is no need yet to seek a reduction in corn-based ethanol production.
Vilsack urged Congress to work with the Obama Administration on ways to improve aid to farmers struggling with a crop that will be sharply reduced by searing heat and a lack of rain.
Hard hit livestock producers and other groups have been calling on the administration to pressure the Environmental Protection Agency to give oil refiners a waiver from the mandate to blend ethanol into gasoline, arguing demand for the corn-based fuel was driving up corn prices.
But Vilsack said it was not a problem right now. "There is no need to go to the EPA at this time based on the quantity of ethanol that is in storage," he told a White House briefing.
Vilsack said the drought was not yet as severe as the 1988 weather disaster in the Midwest.
"Part of the problem we're facing is that weather conditions were so good at the beginning of the season that farmers got in the field early and as a result this drought comes at a very difficult and painful time in their ability to have their crops have good yield," he said.
(Reporting By Russ Blinch; Editing by Gerald E. McCormick and Bob Burgdorfer)