The next few weeks will reveal just how much the drought in the United States has rocked food prices around the world. While the weather conditions will affect global numbers, how much is unknown.

The U.N. Food and Agriculture Organization (FAO), the World Bank's Poverty Reduction and Equity unit, and the Agriculture Department's Economic Research Service will all release data on food and animal feed prices in August. These indexes are expected to reflect the impact of extremely hot, dry weather in the United States.

"It will be up," said Abdolreza Abbassian, a senior economist at the FAO, which will publish the monthly Food Price Index on Aug. 9. "How much up is anyone's guess."

He added, "It would really surprise me if we didn't see a significant increase."

International leaders expect to see a "significant increase" in food price indicators. Photo by Christina Reed, courtesy of USDA.

The Food Price Index hit historic highs last year, increasing the costs of local staples in many regions of the world, with some indication that it played a part in the Arab Spring revolution in Tunisia, Egypt and Libya. Prices began to creep up again in April but then quelled over the past three months, due to favorable growing predictions in much of the world's important agricultural regions.

The World Bank's Poverty Reduction and Equity group will also release a Food Price Watch report in late August.

"An impact, for sure," said Jose Cuesta, a senior economist at the World Bank and author of the Food Price Watch. "Significant, we're trying to figure that out."

Although the trends are global, price fluctuations are highly regional. In last Food Price Watch released in April, for example, the price of rice declined overall. In Kampala, Uganda, however, the price rose by 125 percent (ClimateWire, April 26).

Livestock producers caught in a bind

While the effect of the drought will be felt globally, other factors play a role. As of yesterday, there are delayed monsoons in northern and western India, a harsh La Niña weather pattern in southern Brazil, and intense heat in Central Asia and the former Soviet Union, according to the agricultural news service DTN -- all factors that could raise food prices.

Yet corn and soybean growing conditions remain favorable in China, and dry weather in northern Brazil has helped speed the harvest of sugar cane, dropping the price of the commodity on the market.

The increasing price of grains will squeeze livestock producers, who will be unable to pass the rising costs of grain-based animal feed onto consumers in the short term, said Concepcion Calpe, a senior economist with the FAO.

"We may not see the higher feed cost reflected immediately [in the price of meat] because it takes a little bit of time for the higher cost to be passed," she said. "In any case, it will be difficult for livestock producers to pass on costs to others."

Thus, the price of meat, poultry and pork is unlikely to affect the upcoming FAO index but may show in later months. The price of livestock makes up about 35 percent of the index, said Calpe.

In early August, the Agriculture Department's Economic Research Service will publish data on international feed prices, which dictate the costs of feeding livestock. U.S. cattle, poultry and pork farmers have been hit hard by the spike in corn prices, used for feed. Industry groups recently called on U.S. EPA to lower the required production of corn ethanol, which the industry believes is creating a vicious competition for grain and raising prices (Greenwire, July 30).

Corn prices surged to $8.05 per bushel yesterday.