Food prices are expected to surge worldwide as part of a cascade of ill effects from the intense drought in the United States.
On the Chicago Board of Trade on Friday, corn rose to an all-time high following the release of a report by the U.S. Department of Agriculture that cut its estimate of U.S. corn production by 17 percent—roughly a sixth of the entire corp, gone since early July. The price of corn, as well as soybeans, had already risen in anticipation of the woeful report, but also dropped a little on Friday after reaching all-time highs.
“Based on conditions as of August 1, yields are expected to average 123.4 bushels per acre, down 23.8 bushels from 2011,” the Agriculture report noted. “If realized, this will be the lowest average yield since 1995. Soybean production is forecast at 2.69 billion bushels, down 12 percent from last year. If realized, the average yield will be the lowest since 2003.”
Concerned about a food crisis along the lines of the spike in prices worldwide in 2008, when commodity shortages evolved into export restrictions and hoarding in a number of countries (making things worse), the G20 and UN agriculture officials are planning a major meeting next month or in October. At issue, among other things, will be mandates in the United States, E.U. and other countries that mandate that a certain percentage of corn crops go to make biofuels.
Source: Multi-Housing News