The continued drought in the Midwest of the U.S. food basket is sure to create shortages of food supplies for months to come. It includes crop shortages as well as meat that rely on crops such as corn. Bad weather may even cripple the very young ethanol industry in the U.S.
This year’s drought is coming at a time that plants are at a critical stage in regard to blooming. If no rain is received during July, crops are in great danger. Last year crop damages cost the nation over $78 billion.
The U.S. corn cultivation is at its highest level since 1937. Any failure of crops this year especially corn could have negative economic implications throughout the world. Look at what happened last year. The 2010 draught in Russia sent the wheat prices skyrocketing last year in North Africa and the Middle East. It creates more trouble in poor countries where more than 70 percent of household earnings spent on food. Since the U.S. is the main supplier of corn products in the world, it could create unimaginable difficulties for the entire world. Weather related crop failures in Russia and India will also add to the food shortages and the prices to go higher.