The report piggy-backed on the release Thursday of the United Nations Food and Agriculture Organization’s Food Price Index, which showed global food prices rising by 6 percent, largely because of the US drought. Untimely rains in sugar-producing Brazil and dry conditions in Russia's wheat belt, too, have taken a toll.
The hottest July on record in the Lower 48 and scant rainfall have created the widest US drought since 1956, wiping out much of the corn and soybean crops, which are used globally and domestically for food, feed, and ethanol production. In the US, which is the world’s top exporter of corn, more than half the crop is now considered in “poor” condition. The Agriculture Department on Friday slashed yield estimates by 12 percent, from 146 bushels per acre to 123 bushels per acre.
American farmers had planted the largest corn crop ever this year, in response to high commodity prices and high global demand. The US was supposed to be “swimming” in corn this fall. Instead, the harvest will be a “train wreck,” Kelly Wiesbrock, a fund manager for Harvest Capital Strategies, tells the Reuters news service.
Higher commodity prices mean poorer countries will import much less, putting millions of people on the lower rungs of the global food chain in jeopardy, and potentially creating a situation similar to the world food crisis of 2007-08. In all, estimates for this year's global grain supply are down by 180 million metric tons – enough to fill about 360 supertankers to the brim.