Inflation is rising as U.S. executives cut crop forecasts and issued warnings regarding global grain productions. The USDA issued a grain report on Tuesday which stated "combined production shortfalls and dramatic potential stock drawdowns mean a mich tighter supply picture than just a few months ago." The agency expects U.S. production of corn, soybean, and cotton crops to be less than predictions set earlier this year. The USDA also stated that cotton stocks have reached the lowest prices since 1925. Overseas, wheat prices in Europe soared due to droughts in Russia and decreased exports.
The warning comes in the wake of soaring corn and cotton prices. Farmers are expected to profit but officials warn a global food crisis similar to that experienced in 2007-2008 is imminent. The USDA stated the food pricing index is in the rise, at an inflation rate of 1.4 per cent within the U.S. and 8.0 percent in China. Consumers will be greatly affected by the increased prices as crop yeilds fall and demand rises.
Chicago crop forecaster and president of AgResource, Dan Basse stated: "The world cannot afford to lose any more crop production going forward."