The corn harvest this year won’t be as big as expected, a bad sign in a time of high food prices, low supply, and famine in parts of the world. The WSJ reports:
The plant damage likely means that U.S. farmers for the second consecutive year won’t keep up with surging demand for the crop, dropping U.S. corn reserves by August 2012 to the lowest levels since the mid-1990s.
Economists and food executives said the USDA report signals that the price of corn, which has roughly doubled over the past 12 months, could continue to stoke food inflation at least until the size of the 2012 harvest becomes clear.
This is especially bad news for Egypt, where rising food prices played a role in ousting President Mubarak. With demonstrations returning to Tahrir Square in recent weeks, adding high food prices to an already volatile situation will make life very difficult for Field Marshall Tantawi and his associates.The news won’t help Chinese authorities, either, in their battle against inflation. Soybean prices are also headed up.