Food price rise warning as drought grips America

America’s corn fields are literally being fried, after weeks of relentless drought. On Thursday prices jumped another 4 per cent, pushing corn futures to their highest level since August last year. And, say forecasters, there is no immediate relief in sight.

A state of natural disaster has now been declared in 26 states, covering a thousand counties: according to the National Weather Service, 61 per cent of the country is suffering from drought conditions, while the first six months of this year was the warmest on record. This year’s harvest now looks like being at least 12 per cent less than forecast in June.

Farmers had planted a bumper crop of corn this year, the biggest for 75 years, but it is all being severely damaged by the heatwave: almost a third of the crop is now said to be in a “very poor” condition. While farmers themselves can claim help from the state, or from insurance policies, food supplies and prices are taking a hit.

Corn dogged

Corn has steadily become a staple part of the American diet, as well as the main ingredient in livestock feed, so the impact of higher prices could affect the entire food chain, from breakfast cereal to meat.

You can find corn-based products in crisps, tomato ketchup, bread and all sorts of prepared foods. Fizzy drinks and sweets contain high fructose corn syrup, which is cheap to produce: corn starch is often used in soaps and detergents, and even some medications and things like contact lens solution may contain glucose based on corn.

The US Department of Agriculture is already predicting price rises for eggs, butter, cheese and hogs, while USDA research economist Richard Volpe says food prices overall typically rise by 1 per cent for every 50 per cent hike in average corn prices. That is a hefty increase, when many families are struggling to make ends meet.

The higher prices are not just confined to America. The Organisation for Economic Co-operation and Development has warned that food prices are likely to rise between 10 and 30 per cent over the next decade, with higher cost of fuel adding to the pressure.

Global food crisis?

So will it trigger another global food crisis, with severe shortages and unrest in the most vulnerable countries? Experts say that is not on the immediate horizon, with consumers in North Africa, Asia and the Middle East digging into fairly ample stockpiles, while hoping prices will begin to level off.

In the long term, though, that is unlikely to be an option: not according to the warnings from key global figures at a conference in Oxford this week, which claim the battle for food, water and energy around the world is only just beginning. Britain’s former chief scientist Sir David King told delegates: “We are nowhere near realising the full impact of this yet… we need to do far more to deal with these problems before they become even more acute.”

Britain has joined other nations in pledging to tackle the looming crisis in a more holistic way, directing more help towards small farmers and investing in sustainable agriculture, while cutting back on the waste of dwindling resources. Critics are demanding clearer targets and initiatives, but it is a start, while the government has also acknowledged the need to diversify into produce more suited to a changing climate, in this week’s Green Food Report.

One thing is for certain: there is a whole lot more at stake than the price of conflakes.

Felicity Spector writes about US affairs for Channel 4 News