U.S. DROUGHT

1930s dust bowl still much worse

The worst drought in 50 years continued to ravage crops in the United States this week, boosting soft commodity prices and perhaps the fortunes of some Canadian farmers.

And while the extremely hot and dry conditions are expected to continue this week and perhaps into the fall, officials are cautious not to compare the present situation to the 1930s dust bowl or even the 2007 global food crisis. Yet. “It is a serious situation which has to be monitored closely but it is too early to refer to it as a food crisis situation,” said Abdolreza Abbassian, senior economist and grain expert at the United Nations’ Food and Agriculture Organization.

The drought has been devastating to the U.S. corn crop, driving up prices by more than 55% in the fives weeks since it began in the midwest.

Corn is the benchmark grain in the U.S. and has a huge influence on some of Canada’s biggest crops, like wheat, barley and canola. Since most of the Canadian prairies have been largely unaffected by the drought, farmers could expect to cash in on prices that are as much as 50% higher than they were just a month earlier.

“There is no end in sight to the price buoyancy, for the situation in the droughtplagued growing areas in the U.S. Midwest is becoming more and more precarious,” Commerzbank said in a note on Friday.

Financial Post, with files from Reuters