A fresh surge in food prices could tie the hands of economic policymakers around the world
From Williamsport, Ohio, a first-hand account of the worst drought to grip the corn belt of America since 1956: Scott Metzger told Reuters on Friday that it had rained for about 45 minutes on his farm that day, producing 1.3 inches of rain. Respite, but not much. Since 13 May the farm has only had 2.1 inches of rain.
While some parts of the UK have been recording that in a single day, more than 70% of the midwestern corn belt – breadbasket of the world – is gripped by a catastrophic drought. Little wonder that Metzger declared: “This has been my toughest year of farming so far.” His corn crop was “finished”, he said, because it had never pollinated.
The story is the same across the main growing region in the US, where the National Oceanic and Atmospheric Administration has declared the January-June period the hottest half-year on record in the United States.
The results will be felt far and wide. World corn prices have jumped 55% in just six weeks to a new record. In the first three weeks of July alone, export prices of corn and wheat have increased by an extraordinary 20%. Despite the washout in England and Wales, last month has been declared the fourth-warmest June on record around the globe.
High cereal prices will have huge repercussions. When basic food prices soared four years ago, there were riots over the cost of living in as many as 30 countries. Two years ago, Russia, the world’s third-biggest wheat grower, banned exports of wheat, maize, barley, rye, corn and flour during the country’s worst drought in 50 years. The reverberations, according to Oxfam, were felt as far away as Pakistan, where there was 16% increase in the price of wheat and a near 2% increase in poverty in just a year.
The Russian action, and the resulting price rise, was also viewed as one of the catalysts of the Arab spring, when the high cost of bread sparked protests and leaders were deposed.