Corn prices experienced the biggest one-day rise in nearly 40 years, as indications of a major drop in crop production spur concern of another global food crisis.
The U.S. Department of Agriculture cut its outlook for corn yields in the United States, the world’s main exporter of the grain, by the most in decades, according to broker reports and ft.com. The government says the ratio of leftover stocks to demand will fall to a 15-year low in coming months.
Corn’s sharp two-day gain totaled 12.7%, so much that policymakers are contemplating a repeat of the global food crisis of 2007-08. Analysts also started discussing the level at which prices could begin to shave consumption to bring it in line with supply.
“The market is going to try to ration demand wherever possible,” says Lewis Hagedorn, agricultural commodities analyst at JPMorgan, New York. “The prices sparked talk of a battle for land among other crops, as farmers make planting plans for the coming year.”