Drought hurting many industriesThe drought in the Midwest has led to a huge decline in corn production, and CNN reported that analysts expect a drop of up to 123.4 bushels per acre. The source reports that this year is expected to provide the lowest yield since 1995-1996.

The decline in production has led to a sharp jump in consumer prices. The United Nations released a report indicating food prices worldwide rose 6 percent. The price of corn jumped almost 23 percent in the previous month.

The shortage of corn is having supply chain repercussions across the country. Corn is used to feed cattle, and ranchers are having difficulty getting enough of the product to feed their herds. As a result, they are turning to alternatives like wheat.

Meat prices are expected to rise, as a result of the skyrocketing corn and grain costs, and milk production is expected to decline because of the high feed prices.

Paul McNamara, an associate professor at the University of Illinois, told CNN the tight corn supply may force lawmakers to alter the country's policy on ethanol. The U.S. government currently requires that almost 10 percent of fuel is derived from corn.

In addition to the drought's negative impact on corn supply, it is also hurting soybean producers.

The USDA estimated a yield forecast of 5.4 bushels below last year's yield, and also reported that soybean prices hit an all time high. The jump in direct material cost may mean that consumers will see higher prices when buying products like oil, peanut butter and margarine.
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