After a drier-that-average spring in the Midwestern United States, the key agricultural region is facing a drought that poses major challenges to farms in the area, which will likely have repercussions around the world.
As the world's largest producer of maize and the second largest of soybeans, the drought in the US is expected to push up food prices on the international markets.
Prices for corn, wheat and soybeans, which just a few weeks ago had fallen to their lowest levels in months, are now rising quickly. Drought in the Midwestern United States has caused crop conditions to deteriorate rapidly over the past month. The amount of maize rated good to excellent there has fallen to 55%, the lowest level for this time of year in around three decades.
Prices for maize that will be harvested later this year are up 30%, and soybeans are up 20%. Although some rain is forecast in the next two weeks, it will likely remain dry in the central part of the Midwest. Without substantial rain in the coming month, the consequences could be severe.
The US is the world's largest producer of maize and the second largest of soybeans, both of which are used to feed pigs and poultry. The rising costs for maize and soybeans could therefore further fuel food inflation.
