The daily demand and supply*

Increasing demand due to increasing incomes, increasing populations and increasing government mandates combined with decreasing supply due to previous overestimated of expected crop yields lead to higher prices for food.  That's good for some (U.S. farmers) and bad for others (developing countries and beer drinkers):

The spectre of inflation loomed over agricultural markets after the US slashed key crop forecasts and warned of shortfalls in grains.

The agriculture department on Tuesday cut estimates of US corn yields for a third successive month, forecast record soyabean exports to China and warned of the slimmest cotton stocks since 1925.

“The combined production shortfalls and dramatic potential stock drawdowns mean a much tighter supply picture than just a few months ago,” the agency said in a separate grains report.

...

The price gains will benefit farmers, who the USDA said would earn record amounts for corn this season. But consumers could face pain. Carlsberg, the brewer, on Tuesday warned of price increases as costs swelled for malt and barley. As northern hemisphere farmers contemplate next year’s crop plans, surging prices could generate a so-called battle for acreage among different crops.

Dan Basse, president of AgResource, a Chicago crop forecaster, said: “The world cannot afford to lose any more crop production going forward.”

Ricardo Leiman, chief executive of Noble, the trading house that is one of the top oilseed processors in China, cited “enormous demand” there because of “stronger economy, stronger habits, very strong feed milling margins and very strong prices domestically”.

The USDA said corn yields in the US, the world’s largest grower and exporter, would be 154.3 bushels per acre, down 1.5 bushels from an October forecast that was also a sharp downward revision. At 827m bushels, stocks left over from this year’s harvest would be the lowest in 15 years. Record US ethanol production has added to demand.

via www.ft.com

*I've hijacked John's idea.