* Corn bakes despite scattered rain, soybeans on edge
* U.S. expands disaster aid to 1,369 counties in 31 states
* USDA economist says food inflation will rise in coming
By Peter Bohan and Russ Blinch
CHICAGO/WASHINGTON, July 25 Scattered rain
brought some relief to parts of the baking U.S. Midwest on
Wednesday, but most of the region remained in the grips of the
worst drought in half a century as the outlook for world food
supplies and prices worsened.
The U.S. Agriculture Department forecast that food prices
would now out-pace other consumer costs through 2013 as drought
destroys crops and erodes supplies.
"The drought is really going to hit food prices next year,"
said USDA economist Richard Volpe, adding that pressure on food
prices would start building later this year.
"It's already affecting corn and soybean prices, but then it
has to work its way all the way through the system into feed
prices and then animal prices, then wholesale prices and then
finally, retail prices," Volpe said in an interview.
The USDA now sees food prices rising between 2.5 percent and
3.5 percent in 2012 and another 3-4 percent in 2013.
Food prices will rise more rapidly than overall U.S.
inflation, the USDA said, a turnabout from the usual pattern.
U.S. inflation is estimated at 2 percent this year and 1.9
percent in 2013. Food inflation was 3.7 percent last year but
only 0.8 percent in 2010.
On Wednesday, the USDA added another 76 counties to its list
of areas designated for disaster aid, bringing the total to
1,369 counties in 31 states across the country. Two-thirds of
the United States is now in mild or extreme drought, the agency
Forecasters said that after weeks of hot, dry weather the
northern Corn Belt from eastern Nebraska through northern
Illinois was likely to see a second day of scattered rain. But
in the southern Midwest, including Missouri and most of
Illinois, Indiana and Ohio, more hot, dry weather was likely.
"Most of these areas need an excess of 10 inches of rain to
break the drought," said Jim Keeney, a National Weather Service
meteorologist, referring to Kansas through Ohio. "This front is
not expected to bring much more than a 1/2 to 1 inch in any
particular area. It's not a drought buster by any means."
The central and southern Midwest saw more temperatures above
100 degrees Fahrenheit on Wednesday, with St Louis at 101 F.
"There's no change in the drought pattern, just
thunderstorms shifting around," said Andy Karst, a meteorologist
for World Weather Inc. "There are no soaking rains seen through
The outlook sent Chicago Board of Trade grain markets higher
after prices had come down from last week's record highs.
Chicago Board of Trade corn for September delivery closed
4-1/2 cents higher at $7.94-1/2 a bushel, compared to the record
high of $8.28-3/4 set last week. August soybeans ended 45 cents
higher at $16.94-1/4, compared to last week's record of
$17.77-3/4. September wheat rose 24-1/2 cents at $9.03-1/4,
compared to last week's 4-year high at $9.47-1/4.
The prices have markets around the world concerned that
local food costs will soar because imports will be expensive,
food aid for countries from China to Egypt will not be
available, and food riots could occur as in the past.
The United States is the world's largest exporter of corn,
soybeans and wheat.
Major losses in the massive U.S. corn crop, which is used
for dozens of products from ethanol fuels to livestock feed,
have been reported by field tours this week.
Soybeans, planted later than corn, are struggling to set
pods, but if rain that has been forecast falls, soybeans may be
saved from the worst effects of the drought.
A Reuters poll on Tuesday showed that U.S. corn yields could
fall to a 10-year low, and the harvest could end up being the
lowest in six years. Extensive damage has already been reflected
in declining weekly crop reports from Corn Belt states.
"Monday's crop ratings showed losses on par with the damage
seen during the 1988 drought if these conditions persist," said
Bryce Knorr, senior editor for Farm Futures Magazine. "Weather
so far has taken almost 4 billion bushels off the corn crop, so
a lot of demand must still be rationed."
In Putnam County, Indiana, this week, crop scouts did not
even stop to inspect corn fields since a glance convinced them
that farmers would plow crops under rather than trying to
On Wednesday, scouts in central Illinois reported that some
corn fields were better than expected, having benefited from
early planting and pollination after a warm winter and spring.
Tom Womack of the Tennessee Department of Agriculture said
some recent rains had helped soybean prospects, but "the damage
that has been done to the corn has been done. No amount of
rainfall will help us recover what we lost in the corn crop."
Ohio Governor John Kasich signed an order on Wednesday that
will allow farmers to cut hay for their livestock from grass
growing along highways adjacent to their properties.
Fire threats were growing in portions of the Plains. On
Wednesday, firefighters from three north-central Nebraska
counties and the National Guard battled expanding wildfires that
have consumed more than 60,000 acres in the last week.
On Wednesday, helicopters dumped water on wildfires, ignited
by lightning, that have been burning since the weekend in the
Niobrara River Valley.
"We are making progress, but continued support is needed,"
Nebraska Governor Dave Heineman said.
In Missouri, one of the nation's driest states, the highway
patrol said smoke from grass and brush fires was creating "very
dangerous driving conditions." Discarded cigarettes were cited
as a factor in those fires.
Across the Midwest, cities and towns restricted water use
for gardens and lawns and tried to save stressed trees with
drip bags. Reservoir and river levels were low and being
carefully watched, and restrictions were placed on barge
movements along the Mississippi River and recreational boating.
SHAPE OF THINGS TO COME?
The U.S. drought has been blamed on the El Nino phenomenon
in the western Pacific Ocean, a warming of sea temperatures that
affects global atmosphere and can prevent moisture from the Gulf
of Mexico from reaching the U.S. Midwest breadbasket.
Some scientists have warned that this year's U.S. drought,
already deemed the worst since 1956, is tied to climate factors
that could have even worse effects in coming years.
Dangerously hot summer days have become more common across
the Midwest in the last 60 years, and the region will face more
potentially deadly weather as the climate warms, according to a
report issued by the Union of Concerned Scientists (USC) on
The report looked at weather trends in Chicago, Cincinnati,
Detroit, Minneapolis and St. Louis and smaller cities such as
Peoria, Illinois, and Toledo, Ohio.
The report found that the number of hot, humid days has
increased, on average, across the Midwest since the 1940s and
1950s, while hot, dry days have become hotter.
Finding relief from the heat has become more difficult, as
all the cities studied now have fewer cool, dry days in the
summer and night-time temperatures have risen.
"Night-time is typically when people get relief, especially
those who don't have air conditioning," said Steve Frenkel,
UCS's Midwest office director. "The risks of heat-related
illness and death increase with high nighttime temperatures."
In Chicago, more than 700 deaths were attributed to a heat
wave in July 1995. With more extreme summer heat, annual deaths
in Chicago are projected to rise from 143 from 2020-2029 to 300
between 2090-2099, the report said.
(Additonal reporting by Christine Stebbins, Kevin Murphy,
Michael Hirtzer, Tim Ghianni and Sam Nelson)