US crops tell story of future world food prices

 
Marion Kujawa holds up an ear of corn in Illinois High temperatures and little rain have lead to a seriously damaged corn crop

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Marion Kujawa strips back an ear of corn with disgust.

It's a weedy specimen, only a few inches long. Half way up the cob gleams a solitary golden kernel. The farmer's alarm at this measly harvest may soon be shared by consumers around the world, as food prices shoot up.

Then next ear he picks is even worse.

"There's nothing. Nothing. It should be 10 inches long, completely full of grain but the heat was so bad, 110 out here, that means 140 degrees coming off the ground. It's just burned up. I've done everything I can do. The rest is in the Maker's hands. I can't make rain."

The spry 73-year-old, kitted out in his John Deere cap and denim overalls has farmed these 2,000 acres (809 ha) in southern Illinois for more than half a century.

He's seen drought before. '54 was bad, he says and in the 80s he watched as some good men went under, through no fault of their own.

But this past July has been the hottest in American history and he's never seen anything like this. Devastation has come out of a clear blue cloudless sky, the lack of rain parching good ground into a cracked, pale grave for the crops.

'It's all gone'

Start Quote

Marion Kujawa on his farm in Illinois

You can't sell this. It's all gone. There's nothing there”

End Quote Marion Kujawa Farmer

We tramp through a landscape of shrunken brown plants, dried husks crunching under our feet as Marion searches for some small sign of fruitful growth. The best we can find is an ear that has produced seven kernels.

The corn should be seven feet (2m) high, waving above our heads, green and laden with fat heavy cobs, like the ones you eat slathered in butter. Instead, the tallest plant barely brushes our shoulders.

The folk around here don't like to sound defeatist. They will tell you that they've known hard times, got through them in the past and have faith they will again.

They are not among life's worriers and moaners. Yet their optimism and their prayers have yielded no rain. There is a realisation that for this year, this is it.

"You can't sell this. It's all gone. There's nothing there," Marion says, clutching a bare cob.

"We're on a downslide going into the middle of August. It's done. It's done. Some is going to be worse than others, but it's going to hurt. You have to be strong, but we got nothing to harvest."

His other crop, soya beans, look in a better state. At least the plants are green, and there is some hope for them if there is rain soon. But the pods are so small and tight that he can barely split them open with his penknife blade to show me the bean inside.

The sky is still a perfect cloudless blue and the forecasters have dropped their previous prediction of rain by the weekend.

It doesn't pay to be too optimistic.

Last year Marion sold a $1m (£639,000) worth of crops. This year he will be lucky to make $200,000. Crop insurance and his own prudence, conservatism as he calls it, should mean he will weather the lack of storm.

But there is no getting around the fact that two of the staples of the world food industry are about to become scarce commodities. That means they will also become more expensive.

Soya beans and corn make oil and animal feed, as well as ethanol, to some controversy. But they also go into products you wouldn't think about. Snacks, fast food, even soft drinks.

That means America's drought is going hit us all.

World economy fears

About 500 miles away from the cornfields of southern Illinois, in Chicago, Ceres, the goddess of agriculture stands atop the city's board of trade, the place that claims to have invented futures trading in in the 19th Century.

She has no face, perhaps so as not to show her shame at all the unanswered prayers. Inside, corn traders shout and raise their clenched fists in the air.

"Seven dollars."

"Seven, twenty-one."

"Nine, thirty-two."

"Take it, backed up."

Some gesticulate with both arms, fingers pointing or outstretched. It seems more like a pent-up strike meeting than commerce in action, but the fever will not lessen.

Chicago futures floor Inside the Chicago trading floor

They are all waiting for the crop production report on 10 August, which will set out the situation.

As we look at all the activity, Virginia McGathey, president of McGathey Commodities, tells me that she thinks the figures will be even worse than most people have been expecting.

"The prices are as high as they've ever been," she says. "This was supposed to be the biggest crop ever of corn. The weather was wonderful in the spring and now it looks like we could have lost 50% of the crop. At that point all bets are off."

She points out that American farmers are not the only ones who have been suffering through a lack of rain. It's been the same story in Russia, parts of Asia, and earlier in the year, South America.

"World food prices are definitely going up, and I believe they are going up to stay," Virginia McGathey says. She thinks corn prices could pass $9 a bushel, a price that would be "astronomical".

"If you think back in the day you could buy a pair of tennis shoes for $10, now they're like a $110, we're heading that way with grain prices. You're going to see prices go up, minimum 20% at the grocery stores."

The world economy doesn't need any more bad news at the moment, but the pathetically shrunken cobs in Marion's fields may be wizened heralds of blows yet to land.

 
Mark Mardell, North America editor Article written by Mark Mardell Mark Mardell North America editor

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  • rate this
    -1

    Comment number 15.

    dawshoss : It should also be noted that the process may be a hidden hazard of genetic engineering as it may allow dangerous transgenic DNA to spread from species to species
    The prevalence and importance of HGT in the evolution of multicellular eukaryotes remains unclear and should be a reason for caution.
    HGT works for resistance to antibiotics, not sure about droughts,.

  • rate this
    0

    Comment number 14.

    Why all the hand-wringing about US corn? It's not corn that feeds the world. It's normally so expendable that US turns much corn - not into food - but into ethanol. If there is a noticeable food impact, it will be a shortage in RICE and/or WHEAT, and both of these will become great fodder for the Future Exchanges.

  • rate this
    0

    Comment number 13.

    Not to put to much of a damper on all the enthusiastic doom and gloomers here but all this means is that the US corn crop will be the size it was in 2002 before the big push for biofuels.

    High prices are good for farmers especially those of the third world for whom a decrease in the volume of subsidized American corn dumped in their markets means they can actually earn a decent living.

  • rate this
    +4

    Comment number 12.

    I think it's time (well, come springtime) for more city and suburban folk to plant gardens and grow some of their own food. This will reduce household food expenditures, and free some food resources for others around the country and around the globe. It would also be wise for people to sharpen their garden skills in case of a food crisis. The rain here in New England has been adequate this summer.

  • rate this
    +1

    Comment number 11.

    We are all eating too much in the West anyway, so a 20% rise in prices, matched by a 20% reduction in consumption, should even things out and make us healthier.

  • rate this
    -1

    Comment number 10.

    Boy if only someone could come up with a sort of drought-resistant corn... but oh yeah, horizontal gene transfer is the devil...

  • rate this
    +3

    Comment number 9.

    U$A has been historically the biggest donor of food to major food-aid organizations around the world (wheat, corn, soybeans, you name it).

    Having a huge food surplus.


    This year all bets are off.

  • rate this
    -1

    Comment number 8.

    From the link provided:"The last 12 months were the warmest since modern records began in 1895."
    That's not a very long time.
    Other parts of the country have been very wet.It's raining now as I post&the rice &sugar cane are growing great.I wish we could share our blessings with the MidWest.

  • rate this
    +1

    Comment number 7.

    Expect more riots this summer and next year. Our world simply cannot support 7 billion people, and that's before we run out of fertilizers, pesticides and the means of transporting food across the globe. Things aren't going to get better.

  • rate this
    +11

    Comment number 6.

    I suggest the documentary "Food, Inc." to help put this in better perspective.

    You would think that in American politics, people would see this crisis as a result of our changing climate and vote in people who vow to address it. Instead, you can bet that they'll see this as an economic problem and vote in laissez-faire capitalists. Let's all thank our worthless media.

  • rate this
    +7

    Comment number 5.

    There is 5 times the carbon in fossil fuels already slated for extraction, as is needed to exceed the 2 deg. global temp. rise which will be horrifyingly worse than the 0.8 seen so far. Feeding 7 billion plus a surplus population growing at one million every 4.6 days, is not likely to continue for long. Both problems are due to irrational denial of the population threat, mankind's direst danger.

  • rate this
    +12

    Comment number 4.

    Already the Republicans are saying the hot weather is a left wing conspiracy by commie, muslim, liberal, un-american, Al-Qaeda linked, Obama in his rampage to diminish corporate profits and destroy capitalism as enjoyed by wealthy billionair Republican donors like the Koch Brothers. Yes Obama's hot air is frying american corn fields say Republicans. Has the US gone nuts this election year?

  • rate this
    0

    Comment number 3.

    The fields of waving corn look terrible and the traders are in a panic, (as usual) prices will sky rocket as people try to figure out how to deal with devastating economic loss this season
    We subsidize our farmers because of this type of loss, the futures traders are already a mess because of Co's like JPMorgan/Chase who have cheated on Electricity, now banks will cause corn loss panic for profit!

  • rate this
    +10

    Comment number 2.

    This is a big draught and we are only in year two. It will probably go on for another one to three years. That will cause stress enough, but if it is longer, all those other things you thought you were worried about will pale into insignificance. Farming, as much as we take it for granted, is the foundation of civilization.

  • rate this
    +6

    Comment number 1.

    After the economic, political and social unrest the world food crisis of 2007-2008 created around the world, I hope that these problems are not replicated should there be a similar problem this year.

    Unfortunately, the world is probably in a worse state to deal with a food price crisis than in 2007-2008. Strong international action is needed, but is the UN up to the job?

 

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