The most recent report from NOAA shows a current record US drought deepening with more than 61% of the country now suffering from extreme conditions.
The worst drought in 25 years has severely impacted US agriculture. According to the monitor, in the US’s 18 primary corn-producing states, 30 percent of the corn crop is now in poor or very poor condition. Earlier this year, a combination of increased demand and poor conditions last year resulted in more than 48% of US corn stockpiles being wiped out. In response, the US began planting its largest corn crop ever in May. Now, unprecedented widespread drought conditions are threatening that crop.
The result is that food prices are steadily rising. This Thursday, corn prices had risen by as much as 4% by end of trading. Since mid June prices for corn had risen more than 33%, with prices of wheat jumping 23% and prices of soy rising 13%.
These rising prices reflect anxiety on the part of grain consumers from China to the Middle East and many other places around the world. The crisis has caused many to wonder if this year may be a repeat of 2010, when severe drought damaged Russia’s wheat crop and sent prices soaring. The food scarcity that followed sparked food riots throughout the Middle East and served as a flash-point for the Arab Spring.
This year, threatening conditions include the consistent dryness in the US, another dry year in the Russian wheat belt and the worst start to India’s Monsoon season in three years. These factors have caused increased concerns that regions will impose export restrictions in order to preserve local food security, to the detriment of food importers.
Food security in recent years has also been harmed by the emergence of ‘just in time’ supply, where stockpiles are winnowed down in favor of a rapid response market and delivery system. Such a system works fine so long as abundant supplies are available. But the system is not resilient to crisis events, where the lack of available food in the event of yearly or multi-year droughts can have dramatic impacts on world food security.