Drought 2012: Food Shortages and Global Unrest Possible

Worst Drought Since Dust Bowl

With more than half the US in the grips of the worst drought since the 1934 Dust Bowl, shortages and rising global prices which on corn, wheat and soybeans, which America is the world’s largest exporter, could lead to global unrest.

World prices for corn, wheat and soybeans have already reached record levels, and will continue to affect developing countries that rely on on agricultural imports for food.

“The drought is clearly going to kick prices up. It already has,” said NECSI president Yaneer Bar-Yam. “We’ve created an unstable system. Globally, we are very vulnerable.”

Deregulation has not help the situation. In the late 1990s, food markets were deregulated, allowing hedge funds and investments banks to speculate on prices, making markets susceptible to sudden, sometimes massive, price fluctuations.

“The drought may trigger the third massive price spike to occur earlier than otherwise expected, beginning immediately,” wrote the NECSI team. Price hikes have been credited as the cause of the Yemeni uprising in 2008 that led to food riots and widespread violence. During that same year, killings occurred in Haiti over the doubling of the price of rice, resulting in government rice warehouses being looted.

The 1934 drought and dust storms millions of acres of crops and left 80% of America experiencing food shortages. At a time when much of the world relies on the US for food staples like corn, wheat and soybean, the impact of the 2012 drought could lead to increased global hunger and violence.

Drought 2012: Biggest Natural Disaster in US History

No Relief for America's Heartland

More than half of America is in areas designated natural disaster sites by the USDA have been ravaged by a dry spell destroying crops in nearly 1,600 counties in 32 states.

Among those effected by damage, reports Bloomberg News, are approximately 1/3 of the nation’s farmers, which contributes in making this declaration the largest ever of its kind by the Department of Agriculture.

“Agriculture remains a bright spot in our nation’s economy,” Agriculture Secretary Tom Vilsack tells the country this week in an official statement. “We need to be cognizant of the fact that drought and weather conditions have severely impacted farmers around the country.”

The heartland of America's agriculture community, the Midwest, is suffering from moderate to extreme drought.

“Farmers and ranchers are at the mercy of Mother Nature,” Kansas Governor Sam Brownback says in a statement. Brownback’s state produced $8.2 billion in crops in 2010, but with historic dry weather whithering crops this year, Kansas expects a monumental drop.

Corn, the largest cash crop in the US, has been the hardest hit by the drought with only 35% of corn supply in good to excellent condition as of this past weekend, down from 48% percent only a few weeks ago. Soybean crops, America’s other top agriculture product, has also been largely destroyed.