The world faces a protracted bout of extremely high food prices, the US government has warned, overwhelming farmers ability to cool commodity markets by planting millions of additional hectares with crops.
The US Department of Agriculture on Thursday forecast nominal record farm-gate prices for corn, wheat and soyabeans in the crop year that begins with the 2011 harvests.
It added that food inflation would surge in the second half of this year as wholesale prices filtered through the supply chain, affecting consumers.
The warning at the USDA Outlook Forum in Washington, the biggest annual gathering of the agribusiness sector, is likely to fuel global concerns about rising inflation and the potential for destabilising food riots in developing countries.
Joseph Glauber, USDA chief economist, told the conference that in spite of higher planting for corn and soyabeans this spring, grain and oilseed markets were still forecast to be tight in 2011-12 due to strong export and biofuel demand.
Mr Glauber forecast that the heavily subsidised US ethanol industry s demand for corn would continue to grow in spite of higher input costs, consuming about 36 per cent of the domestic crop.
The ethanol industry has been criticised for driving food prices higher.
But Tom Vilsack, US secretary of agriculture, ruled out any change in the US ethanol policy.
Analysts said the USDA forecasts for production, demand and stocks for the 2011-12 season, and Mr Vilsack s affirmative comments about ethanol, meant agricultural commodities prices could surge even higher this year.
As the US exports half of the world s corn and a third of the world s soyabeans, changes in US acreage and, hence, the potential supply has a global impact, affecting international buyers such as China.
