Download Now! Actions to Transform Food Systems under Climate Change

Not to be outdone by surging wheat and soy prices, now corn too has entered the race. The Economist (14 October 2010) reports:

"The relentless summer sun (after earlier floods) led to the [October world supply-and-demand estimates from the United States Department of Agriculture (USDA)] report’s conclusion: 'Corn production is forecast 496m bushels lower as a 258,000-acre increase in harvested area is more than offset by a 6.7-bushel-per-acre reduction in yield.'

"...On October 8th, the day of the report’s publication, news that America’s production of corn (elsewhere known as maize) would be 4% lower in 2010 than previously estimated sent prices surging by 6%, enough to stop trading on the Chicago Board of Trade. Corn triggered limits again on October 11th after rocketing by 8.5%, the biggest one-day rise in 37 years. By mid-week, corn was changing hands for $5.88 a bushel.

"There are two reasons for this dramatic response. First, the news from the USDA was unexpected....The second is the importance of America for a crop eaten by people and livestock and also used to produce ethanol for fuel. The country harvests two-fifths of the world’s corn and provides nearly 60% of global exports. Even a small revision in forecasts corresponds to a huge volume of corn.

"...[But] The doom-mongering is premature. This year’s harvest will be the third-largest yet seen, and although stocks will run down, supplies are adequate for the 2010-11 season. Still, as Abdolreza Abbassian of the UN Food and Agriculture Organisation says, such talk can add to the upward price momentum."