* U.S. Plains and western Corn Belt suffer the most
* Winter wheat, cattle, hay are at greatest risk
* Bumper crops possible despite early dryness, say USDA
* Record $16 billion-$17 billion crop insurance cost in 2012 drought
By Charles Abbott
WASHINGTON, Feb 14 (Reuters) - U.S. farmers will plant crops this spring under the shadow of a persistent drought that grips prime farmland from the Mississippi River to the Rocky Mountains, with grain supplies already tight from drought losses in 2012.
In all, 56 percent of the contiguous United States is under moderate to exceptional drought, twice the usual amount, the Senate Agriculture Committee was told on Thursday.
Arid weather was expected to run until May in the wheat-growing Plains and in the western Corn Belt, where corn and soybeans are the major crops.
“In fact, we are forecasting drier conditions,” said Roger Pulwarty, director of the National Integrated Drought Information System, a federal agency. Above-normal rainfall benefited the southern Plains at the start of this year.
Wheat, corn and soybeans are the most widely grown U.S. crops and form the foundation of the U.S. food supply. They are used in livestock rations and as ingredients in food ranging from salad dressing to bread, breakfast cereal and cookies.
Some 59 percent of winter wheat was under drought conditions, said Joe Glauber, Agriculture Department chief economist. “While that also implies that spring planting may be affected by drought conditions as well, there have been improvements in the eastern Corn Belt, where many areas are no longer experiencing drought.”
With adequate rainfall during the growing season, U.S. yields will rebound to normal levels, leading to bumper corn and soybean crops. In turn, commodity prices would fall as near-empty grains bins are filled. The corn stockpile is expected to be smallest in 17 years by harvest-time this year.
The government’s three-month outlook says drought will persist in the central and southern Plains and the U.S. Southwest while easing in Iowa, Missouri, Wisconsin, Minnesota and the Dakotas.
Most of U.S. cattle and hay production areas are under drought conditions, said Glauber. Ranchers and cattle feeders culled herds as pastures withered and feed costs soared in 2012.
“Particularly for cattle producers, the next four to five months are critical,” said Glauber. “Hopefully, some spring rains to get pasture conditions back up” while abundant crops in the fall “should help relieve feed prices.”
The 2012 drought ranks second to 1934 as the most widespread and severe drought, said Pulwarty. But in the Midwest, 2012 was the driest summer on record with half of the usual rainfall.
Crop insurers paid a record $14.2 billion as of Monday for crop losses in 2012, almost all due to drought. The old record was $10.8 billion in 2011, also a drought year.
Indemnities could total as high as $16 billion or $17 billion when all claims are settled, said Glauber. USDA oversees the federally subsidized insurance program.
“The western Corn Belt remains dry, no doubt about it,” Glauber said after the hearing. He said rainfall and temperatures in late summer, when corn and soybeans mature, are far more important than early-season moisture levels in determining yield.
“It’s still very, very early,” he said.