The worst drought in the US in at least half a century has destroyed one-sixth of the country’s expected corn crop over the past month, threatening a surge in global food inflation.
The US government estimated corn farmers had abandoned fields greater in area than Belgium and Luxembourg after the hottest July in US history irreparably damaged their crops.
The harvest for soyabeans, largely crushed into animal feed and vegetable oil, would be the lowest in five years.
The US agriculture department forecast prices for the two crops would break records, with domestic corn averaging between $7.50 (€5.99) and $8.90 per bushel when the harvest starts.
“We’re going to see very high prices,” said Joseph Glauber, USDA chief economist.
Tom Vilsack, US agriculture secretary, cautioned that the true supply picture would only emerge later this year. “In the past, estimates have been off in drought years. We have to be cognisant of that fact,” he said.
– (Copyright The Financial Times Limited 2012)
