The price of corn is up 33%, and America’s reserves of corn have declined nearly fifty percent since March. Soybean prices are up 13%, and wheat costs 23% more than it did at the beginning of the year. Plus, drought is getting dryer across the Corn Belt of the United States, the world’s largest exporter of corn and wheat. Even though the U.S. has more acres planted in corn this summer than it’s had any year since 1937, only 48% of the corn crop has a “top-quality” rating. That’s compared with the 69% of the corn crop that earned the highest rating last year. This year, corn future have risen a third in the last month, to $6.75/bushel.
According to a senior economist at the UN’s Food and Agriculture Organization in Rome, “The world looks to the U.S. as the safest source of supply. Everyone watches the U.S. because they can rely on it. Without it, the world would starve,” reported Bloomberg.
Adding the global uncertainty of the food supply is government policies that have intentionally kept food stockpiles small. Governments now allow commodity prices to follow the market more closely, rather than buying up all excess food as they did until the 1980s. This keeps inventories small worldwide—and limits the amount of food stored for the future.
More than 60 riots took place worldwide over food supplies between 2007 and 2009, and more are expected to come—particularly if this year’s drought continues in the U.S.
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