Global food crisis looms as grain prices soar

What looks to be the worst U.S. drought in a quarter of a century has given rise to an old-fashioned commodity rally on world markets, with key grain prices hitting highs which caused food crises in vulnerable parts of the globe last time around.

Seeking to protect their populations from hunger this time, many countries relying heavily on imports have held off for now, touting healthy stock levels and hoping other sources will come through and bring prices down.

But their hopes may be dashed if they all return to market at once.

With so much of the world putting faith in a record U.S. corn crop, it is little wonder that prices have surged around 40 percent in the past three weeks as relentless dry weather melted yield expectations for cereals. Soybeans are at record highs, while wheat is not far behind.

“Production potential looked great and it kind of lulled these end-users into a false sense of security. At that point we were seriously looking at (corn) prices under $5 if weather conditions remained ideal, but now we’ve rallied sharply higher and never looked back,” Jefferies Bache analyst Shawn McCambridge said.

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Photo credit: Giro555

  • crescentfang

    This is a “no brainer”. Just repeal the ethanol mandate and stop converting corn to alcohol. It was a bad idea to begin with and is now clearly unnecessary.

    • toomuchsense

      Unfortunately “crescentfang,” we’re dealing with a large population of our citizens with “no brains.” “Clearly” has no inroad with those with cloudy minds and the others with a major deficiency in morals.

    • The ‘best’ feature of Ethanol is the proven Fact that if it is used as a 10% additive to gasoline, it results in a 10% reduction in fuel economy per mile. The engine control computer adjusts the equation in max performance per emissions… at the exhaust sensor. More oxygenating Ethanol, demands as race drivers/mechanics have Always known, a ‘Richer’ mixture. Too bad that the education system in the USA is so Liberally wrought with keeping Everyone happy through non competitive grading systems…. In Social Studies. That is why students (those with low SATs) don’t really find ‘competitive’ Engineering and Science… fun.