FT piece on how the intense heat and drought currently across most of the US farm belt is causing grain futures to rise.
Few farmers in America's corn belt have seen anything like it. Only weeks ago, they were looking at a record-breaking harves. Those hopes are fast turning into a mirage.
The hote summer in the US, the world's biggest exporter of corn, soyabeans and wheat, could have far-reaching effects on global agricultural markets, where memories of the 2008-08 food crisis are still fresh and price have been volatile on the back of a drought in South America.
Indiana is a big corn and soybean producer, and I can tell you that, after a very dry winter and unusually non-rainy spring, we haven't seen significant (more than half an inch) rain since 1 May. We are thus phenomenally dry - as in, unless you irrigate your lawn, you're done mowing (as I have been) for about 4 weeks now.
Example of US corn: farmers here planted 5% more acreage this year, and under reasonable circumstances, there were very solid expectations for record harvest.
Point being, we are looking at very far-reaching - as in, global - repurcussions on food prices, which - by extension, determine a lot of political stability in countries with high import requirments (Southwest Asia leads the way) and where well over half of family household budget is spent on food (virtually the entire Gap).