Terry Macalister August 12, 2012
Fields of pain … Arlan and David Stackley inspect a drought-affected cornfield in Kansas. Photo: Mashid Mohadjerin/The New York Times
The worst drought in decades has experts warning of a world food crisis.
The United States government has slashed its forecast for drought-hit corn production by 17 per cent, raising fears of a new global food crisis and sending some commodity prices to record levels.
The US Department of Agriculture said corn output would reach only 10.8 billion bushels for 2012-13, while yields were likely to be 123.4 bushels per acre - the lowest for 17 years.
Predicted soybean production has also been slashed from 3.05 billion bushels four weeks ago to 2.7 billion on Friday as farmers see crops devastated by the country's worst drought in more than half a century.
The latest reduction in estimates propelled corn futures on the Chicago commodity exchange to $8.30 a bushel and accelerated a 60 per cent increase in prices over the past two months. The US is the biggest producer of corn, soybeans and wheat in the world and a poor harvest means prices will rise and stockpiles will remain depleted.
The midwest growing area has been hit by the worst drought in 56 years. The Department of Agriculture earlier last week said half of the nation's corn crop was rated poor to very poor while the latest US drought monitor map showed conditions continuing to worsen.
The National Oceanic and Atmospheric Administration reported on Wednesday that the first seven months of 2012 were the warmest on record for the nation; temperatures in July broke a record high that was set in the Dust Bowl of the 1930s.
Some fear that growing signs of shortages will prompt some countries to impose export bans or make panic purchases, as they did in 2008, during the last dramatic price spike.
''Several urgent actions must be taken to address the current situation to prevent a potential global food price crisis,'' said Shenggen Fan, head of the International Food Policy Research Institute.
He said countries should reduce the amount of grain used for biofuels, re-igniting the ''food not fuel'' debate about whether land should be devoted to growing corn for ethanol at a time of rising food costs.
The director-general of the Food and Agriculture Organisation at the United Nations, Jose Graziano da Silva, said he wanted a halt in US government-backed production of ethanol, which is mixed with petrol to make ''greener'' fuel.
''An immediate, temporary suspension of that mandate would give some respite to the market and allow more of the crop to be channelled towards food and feed uses,'' he said.
The FAO's food price index, which measures monthly cost changes for a food basket of cereals, oilseeds and others, has hit 213 points, up six points on a month ago.
Senior economists at the agency warned there was the potential for the situation to develop like the food crisis of 2007/08, when there were violent protests against the price of food in countries such as Egypt and Haiti.
With a surge in food prices, British charity Oxfam warned the developing world would be hit hardest.
''The combination of rising prices and forecast low reserves means the world is facing a double danger,'' Oxfam's Hannah Stoddart said. ''As usual, it will be people in developing countries who will be hit the hardest, with millions who are currently 'just getting by' starting to go hungry.''
Guardian News & Media