WASHINGTON, D.C. - The ongoing drought in the Midwest will soon trigger a global food crisis, Bloomberg reports. The International Food Policy Research Institute is asking the United States to stop its biofuel production because it uses 40% of its corn crop.
"The major problem is policy," said Shenggen Fan, the institute€™s director-general, on Bloomberg Television. "Biofuel production has to be stopped. That actually pushed global food prices higher and many poor people, particularly women and children, have suffered."
Corn skyrocketed to a high of $8.49 per bushel on Aug. 10, and has risen 57% since June 15. Global food inflation has jumped 6.2% last month, from its June reading, the largest monthly increase since November 2009, according to the U.N.€™s Food & Agriculture Organization. The worst U.S. drought in 50 years slashed corn yields dramatically.
U.S. senators and representatives have asked the U.S. Environmental Protection Agency to reduce the ethanol mandate for 2012 and 2013. From September 1, 2011, until August 2012, around 4.5 billion bushels of corn has been turned into ethanol in the United States.
"If we don€™t take urgent quick action, another crisis will hit us very soon," Fan said. "Governments, the global institutions like the FAO, the World Bank, and the G-20 need to monitor the situation, the prices, production, trade and certain policies."
Later this month, France and the United States will discuss getting the Group of 20 officials together to talk about soaring soybean and grain costs.
New NACS Resource
Read more about this pressing issue and how the renewable fuels standard could be affected in "Raining Corn Politics," a new addition to the NACS Retail Fuels Report.