U.S. corn and soybean crops, the world’s largest, are in the worst condition since the last major drought in America’s breadbasket in 1988, the government said on Monday, pushing up grain prices and raising the prospect of global food-price inflation. Corn and soybean prices soared at the Chicago Board of Trade, based on forecasts that thirsty crops will get no relief for at least another week, although a record-shattering heat wave abated over the weekend in the eastern half of the country.
The U.S. Agriculture Department said its surveys showed only 40 percent of the corn and soybean crops were rated in good to excellent condition, the lowest rating at this stage of the season since the last severe U.S. drought in 1988. The implications for the world food system of U.S. crop losses are massive. The United States exports more than half of all corn shipped worldwide and is a major supplier of soybeans to China, the world’s most populous country. Food price inflation takes time to feed into the grocery counter, but dairy, meat and poultry — all dependent on corn for feeding animals — generally feel the brunt first. Drought-shortened U.S. crops would also reduce America’s ability to supply food aid to needy nations at a time when South America’s farmers have also been hurt by drought.