Chart: When Corn-ageddon meets China-pocalypse10 August, 2012, 22:56. Posted by Zarathustra
The US Department of Agriculture has revised their corn yield and production forecast downward again as US drought continues to affect production.
The forecast U.S. corn yield is reduced 22.6 bushels per acre to 123.4 bushels as extreme heat and dryness continued, and in many areas worsened, during July across the Plains and Corn Belt. As forecast, the 2012/13 corn yield would be the lowest since 1995/96. Corn area harvested for grain is also lowered, down 1.5 million acres from the last month’s forecast that was based on the June Acreage report… U.S. corn production for 2012/13 is forecast at 10.8 billion bushels, the lowest since 2006/07.
Previously, Société Générale noted that meat prices inflation in China appears to be quite correlated with the changes in global corn price. The chart below shows a longer time series of year-on-year changes of corn price and meat price inflation (as measured in the meat component of China’s CPI, %yoy). As you can see, both track each other pretty well, and any upswing in food prices at this moment will not be welcome during “China-pocalypse”.
Source: Datastream, National Bureau of Statistics