Food squeeze feared as chance of U.S. drought seen

By Ayesha Rascoe - Analysis

WASHINGTON (Reuters) - The U.S. Midwest has enjoyed nearly 20 years without a major drought but forecasters worry the corn belt's luck could dry up this year, further squeezing tight global supplies amid soaring food prices.

With its last major drought in 1988, the Midwest has reached its average span of 18.6 years between droughts.

Considering that statistic and current weather conditions, Iowa State University extension climatologist Elwynn Taylor said the corn belt has a one in three chance of drought this year.

"We do have to be prepared," Taylor said. "A 33 percent chance is high, that's a risk."

The Midwest's chances of drought are exacerbated by La Nina, an unusual cooling of Pacific Ocean surface temperatures that can trigger widespread changes in global weather patterns. If La Nina has not dissipated by July, Taylor saw a 70 percent chance for U.S. corn yields below the 30-year trend of 150.6 bushels per acre.

"We don't have any reason to think La Nina causes drought, but it certainly does aggravate it," Taylor said.

Drought is not a foregone conclusion for the Midwest, where excessive wetness has held up spring corn plantings. Crops may benefit from that extra soil moisture during a dry summer, said Brad Rippey, a U.S. Department of Agriculture meteorologist.

"It's way too soon to have any great alarm," Rippey said.

But crops planted during wet springs can develop shallow roots, making them more susceptible to a summer drought, warned National Oceanic and Atmospheric Administration drought specialist Doug Lecomte.

Lecomte said he saw a slightly heightened risk of drought, largely because there is tendency for dryness and warmth in western corn belt during and after La Nina.

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If a drought brought on a major crop failure in the United States, the world's breadbasket, it would wreak havoc on global food prices, already at record levels.

A drought could push the price of corn to $8 to $10 a bushel, said Ron Plain, a professor of agricultural economics at the University of Missouri. May corn on the Chicago board of trade was at $5.82-1/4 a bushel at midday on Friday.

"Immediately, there would not be a whole lot of impact on the U.S.," Plain said. "The way we'd be impacted would be through meat, milk, and egg prices."

A spike in corn prices would hit U.S. livestock producers especially hard since they use corn to feed their animals.