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
    -9

    Comment number 115.

    114 Socialism and Communism create poverty by robbing successful efforts in order to subsidize failure and lack of effort.True socialist countries eventually become impovrished, what little is available is enjoyed by only a handful of elites as a reward for supporting a ruling central planning tyranny. The EUSSR, Cuba and North Korea are three cases in point.

  • rate this
    +15

    Comment number 114.

    @powermeerkat (and Suilerua and LucyJ)

    Not every problem is a political one. Sometimes we need to put aside our political differences to solve potentially serious world problems, such as this.

    Not everything is a communist or socialist conspiracy designed to rob the right of money and wealth.

    This problem needs careful consideration from experts, not politicians looking to score points.

  • rate this
    -6

    Comment number 113.

    "Socialism would be Equal Distribution to all Workers in Farming Community and donations to the poor"




    Isn't it what they've been doing in North Korea for decades?

    With millions of North Koreans still literally starving?

  • rate this
    +3

    Comment number 112.

    hagishead (#110): What success have you had at growing soyabeans in our climate?

    BluesBerry (#109): How exactly do the Commodity Markets affect the weather?

    The sooner basic economics gets into the national curriculum, the better, IMHO. The level of general ignorance of the subject is a scandal.

  • rate this
    +1

    Comment number 111.

    No:94 d_m

    I take your point however if you look at the link below which shows underground aquifers throughout the US I would expect some of these water sources could be tapped into. It would probably be expensive drilling into these aquifers but ultimately it comes down to how desperate you are to get water.

    http://nationalatlas.gov/mapmaker?

  • rate this
    +6

    Comment number 110.

    99% of the population have become so detached from the balance of nature and where their food comes from. Most are totally oblivious to the incredibly fine balance that now exists between an ever increasing population and the farmland that has been stretched to its limit. There needs to be a change in teaching that allows us to appreciate this balance and also learn to grow your own food!

  • rate this
    +1

    Comment number 109.

    Can we agree on the following?
    We should use benign technology - not antidotes that are worse than the problem (s) - like shooting nearly microscopic particles of glass into the Earth’s upper atmosphere or cutting down trees.
    We should examine (CLOSELY) the activity & effect of Commodity Markets, especially related to food products.

  • rate this
    -12

    Comment number 108.

    The collapse of Europe's economy may result in collapse of many of its industries including agriculture.For example many French farmers depend on government subsidies to stay solvent.If the worst happens it won't be the first time the US has to send food to Europe in an emergency.I hope this time they eventually have to pay for it.US generosity is one more aspect of America others take for granted

  • rate this
    -12

    Comment number 107.

    105 I know to many Europeans the idea of making a profit is repulsive. But like it or not, as President Coolige said;"The business of America is business." That's why it's the land of opportunity, it's the place to go to profit from work and risk.There are no guarantees here.A guarantee you won't fail as in socialist Europe is also a guarantee the best you will ever achieve is mediocrity.

  • rate this
    +2

    Comment number 106.

    Price surge should be reviving debate over the role of financial speculators in commodity markets. Commerzbank has joined 2 of its German peers in RESTRICTING food-related investments, stripping agricultural products from its ComStage ETF CB Commodity EW Index TR - a little $145M commodity index fund.
    What is US govt doing?

  • rate this
    +1

    Comment number 105.

    US crops tell story of future world food prices. What does this mean? It means that whether crops fail or prosper, commodity traders can turn any tragedy involving commodities into a money maker. There are signs of unusually large early buying & huge stockpiling. High oil prices, growing use of biofuels, soaring grain futures' markets & restrictive export policies: There is money to be made!

  • rate this
    -3

    Comment number 104.

    USDA works with universities & farmers to develop new crops and learn everything possible about every aspect of food production, processing, storage, I think even preparation.It was responsible for "miracle crops" developed to end famine around the world by overcoming climatic conditions and variables and resistig pests and plant diseases.If there's a solution and this is long term they'll find it

  • Comment number 103.

    This comment was removed because the moderators found it broke the house rules. Explain.

  • Comment number 102.

    This comment was removed because the moderators found it broke the house rules. Explain.

  • rate this
    -1

    Comment number 101.

    The decrease in US grain output will remind the world just how dependent we all are on the abundance of American agriculture most take for granted or don't even know about.Despite only about 1 or 2% of US workers being in the ag business the US is the number 1 producer of food.I think its our largest export sector.USDA is the single greatest source of information about food in the world.

  • Comment number 100.

    This comment was removed because the moderators found it broke the house rules. Explain.

  • rate this
    +2

    Comment number 99.

    Wonder how the Americans are going to pin the blame on climate change on the British or the Chinese?

  • rate this
    +4

    Comment number 98.

    Even the Egyptians over 2000 years ago used to store grain for such occasions. It seems our leaders who continue to exhibit a lack of any wisdom, have now become our biggest liability. They are all talk when things are headline news, but once the spot light fades a little, their help evaporates with the wind.

  • rate this
    +1

    Comment number 97.

    Developing Countries

    America is one of the most advanced countries in the world, but if you judge society by the standard of life lived by its poorest, US has some third world ghettos within its developed western lifestyle.

    European safety net for minimum basic standards such as food, clothing and shelter provisions for homeless, free education and health care would equalize inherent disparities

  • Comment number 96.

    This comment was removed because the moderators found it broke the house rules. Explain.

 

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