Food prices set to soar as worst U.S. drought for half a century forces corn farmers to abandon fields the size of Belgium and Luxembourg
Drought has destroyed one-sixth of U.S. expected corn crop
Soyabean harvest expected to be the worst for five years
Food manufacturers warn they will pass on price rises to consumers
By Rob Preece
13 August 2012
Food prices are expected to surge after the worst drought in the U.S. for half a century destroyed one-sixth of the country’s expected corn crop over the past month.
The hottest July in U.S. history has caused irreparable damage to crops, forcing corn farmers to abandon fields greater in area than Belgium and Luxembourg.
Soyabeans, which are used for animal feed and to make vegetable oil, have also been affected, with this harvest likely to be the worst for five years.
USDA now expects 10.8billion bushels of corn to be produced this year – 2.2billion bushels less than the projection it made last month.
USDA chief economist Joseph Glauber told the Financial Times: ‘We’re going to see very high prices.’
The problem could have far-reaching consequences internationally.
In 2007-08, high food costs led to riots in more than 30 countries, but Jose Graziano da Silva, the director general of the UN’s Food and Agriculture Organisation, said the current crisis was not as severe.
‘We do not have the demand pressure from China and India as five years ago.’