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U.S. drought sparks global food price hike

Aug. 9, 2012 at 1:58 PM   |   Comments

UNITED NATIONS, Aug. 9 (UPI) -- The drought afflicting the U.S. midsection is causing food prices to rise globally, the United Nations said Thursday.

The United Nations' monthly Food Price Index indicated food prices rose 6 percent in July after three months of decline, CNNMoney reported.

Record-high grain prices, specifically corn prices, were blamed for the increase.

The U.N. report said global corn prices surged nearly 23 percent in July, aggravated by "the severe deterioration of maize crop prospects in the United States, following drought conditions and excessive heat during critical stages of the crop development."

Food prices have been creeping in the United States as high temperatures and virtually no rain across the Midwestern and Western states parched lands, drying up crops and driving up prices.

Besides corn, some of the most dramatic increases in U.S. food prices have been in ground beef and steak, as well as fats and oils because they use soybeans, which have been hurt by the drought.

The price of sugar spiked at 12 percent in July, although because of untimely rains in Brazil, not because of the U.S. drought, CNN said.

Paul McNamara, associate professor at the University of Illinois' College of Agriculture, told CNN grain prices could rise further, as cattle ranchers substitute grain for corn for feed.

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