ST. LOUIS — Concerns of a looming global food crisis, similar to the one the world experienced in 2008, have risen as the worst drought in 50 years continues to scorch and shrivel U.S. crops this summer.
As the St. Louis Post-Dispatch reports, even some experts who expected the U.S. Department of Agriculture to chop its forecasts for corn and soy production this summer were surprised by last week’s stark report from the USDA that cut corn production estimates by 13 percent and soy by 12 percent:
“I was thinking we wouldn’t have had as big of a drop,” said Pat Westhoff, director of the Food and Agricultural Policy Research Institute at the University of Missouri. “I didn’t believe it when I saw it.”
With the U.S. producing 40 percent of the world’s corn and 37 percent of its soybeans, nations around the world are understandably anxious. But if countries start hoarding grains, their actions could deepen the crisis further:
“We’re seeing export taxes; we’re seeing conditions in Russia get worse; we are seeing record high corn prices,” said Bill Tierney, chief economist with Chicago-based Ag Resource Company. “There are a number of things that could happen, mostly within the realm of inappropriate government policy that could make it worse for everyone else.”
Weather comes to everybody’s mind these days when talking about food prices. But an infographic from the CME Group, which operates several exchanges for commodity futures, shows a range of complex factors affecting the cost of food. Along with weather, energy prices, biofuel policies, the value of the dollar and competition for land all add to what world pays for food. Take a look: