Daniel Dayen worries that the Midwest drought could threaten stability abroad:
Combine [the rising consumer price index forecasts] with the fact that the population is increasing at the rate where we actually need to double global food output over the next several decades to meet demand, and you have a total disaster in the making, where it will become cost-prohibitive for the planet to feed itself. This is why we can expect the drought in the near-term and the long-term to cause global unrest, just like it did in 2007 and 2010, the last times we saw a rapid price spike
Analysts are already worrying about the implications for China, where corn scarcity typically drives up pork prices. Since the Chinese consume 52 million tons of pork annually, rising pork prices could spur overall inflation. And Naked Capitalism notes, "High pork prices caused social unrest in the recent past."
(Photo: A field of dead corn sits next to the Lincolnland Agri-Energy ethanol plant July 25, 2012 in Palestine, Illinois. This summer's extended drought, which has scorched corn and soybean crops across the Midwest, is expected to impact the price of gasoline which, in most states, contains at least 10 percent ethanol. The price of ethanol on the Chicago Board of Trade has risen nearly 25% this year. By Scott Olson/Getty Images)