Drought in the US Pushes Meat Prices Upwards

In our view, the situation will be particularly bad as regards maize because the US is a major provider of that product on the global market. If irregularities in maize deliveries take place problems with livestock feed will arise and it is already clear that prices on fodder will go up  to be followed by growth in meat and milk prices.  Though Russia does not buy maize from the US, the US drought will have an indirect effect on it through growth in fodder prices.   

So far, it is difficult to predict the extent of the crisis. In the near future, it will be clear if the yield of maize has only decreased or has been destroyed entirely in certain regions of the US. Depending on that information, it will be possible to predict if the food crisis breaks out.   

On the other hand, with a normal harvest the US used to spend much maize on production of biofuels.  With such developments, it is likely that redistribution will take place: that maize which was earlier utilized for production of biofuesls will now be used as fodder.

Also, it is important to receive the data on harvesting in other countries. Most probably, export flows will be redistributed.  

V.Ya. Uzun, Doctor of Science (Economics), Leading Researcher of the Department of Agricultural Policy