At present, the United States is hit by the worst drought weather in more than 50 years. Its agricultural is seriously affected by continuous high temperature. Because soybean, corn and other products are in the key period of growth, the reduction is a foregone conclusion which caused a sharp rise of international soybean and corn future price to make the international community increasingly uneasy.
On August 10th, the United States Department of Agriculture (USDA) reported that the supply of main crops including wheat, coarse food grain, rice, and oilseed (except cotton) in 2012/2013 is expected to decline due to the factors of extreme weather. The report showed that in 2012/2013, global wheat supply will decline to 2.1 million tons. Global wheat consumption will rise to 3.5 million tons. Global roughage supply is expected to decrease 56.5 million tons because of the reduction of American corn supply and the demand also cut 38.9 million tons. Global rice yield will be cut 1.9 million tons. The production of India, Korea, and Brazil is expected to reduce, so the increased production of China and South Korea can only partly offset the reduced production of countries previously mentioned; Global oilseed production will decline 8.5 million tons than expected. The production of beans, sunflower seeds, peanuts, and cottonseed will drop, and only rapeseed production will increase.
According to the World Bank, in 2012, all non-cereal agricultural products prices including wheat, corn, and soybean generally rise. The global prices for corn and wheat have risen by more than 45 and 50 percent, respectively, since mid-June. Soybean prices are up nearly 30 percent since June. The higher corn and soy prices also drive up demand for wheat. As a result, the cost of that grain is on the rise as well.
Note that the US is the top producer and exporter of corn. Our account for nearly half of the world’s corn and also a third of the world’s soybeans, the harvest for which will be the lowest in five years. Driving those increases, the bank said, are a number of factors: What is called the “exceptional” U.S. drought; a dearth of rain for Russian, Ukrainian, and Kazakh wheat crops; too much rain throughout much of Europe; and assorted other adverse environmental conditions. The natural disaster seemingly happened in America, has spread into the Middle East, Africa, and Asia. Once the relevant countries put an export ban, the world will face a food crisis severer than the one in 2008.