Farmers are benefiting from the drought strangling U.S. corn and soybean crops.
Not U.S. farmers, of course. Farmers in foreign nations with burgeoning agricultural sectors could see massive bumps in their profits this year, as prices for major crops rise to record highs.
"If we're producing 40 percent of the global corn production ... and we're seeing a significant downturn in output this year in corn production, that does send strong upward price shocks to corn around the world. And as far as producers that are able to produce in terms of those grains, that can be good news," says Bruce Johnson, professor of agricultural economics at the University of Nebraska-Lincoln.
In the U.S., corn prices have hit record highs, with corn for September delivery surging past eight dollars per bushel. Soybean prices have also skyrocketed, with August soybeans over $17 per bushel. Those are remarkable leaps—at the beginning of June, that corn sold for just over five dollars per bushel, and soybeans just over $13. And with grain markets that span the globe, that means higher prices in countries where a drought isn't taking a bite out of corn output.
High prices and a bumper corn crop are likely to boost India's corn exports to record levels this year, as Reuters reported Thursday. Record soybean crops are expected in Brazil, Argentina, and Paraguay, according to MarketWatch.
It's not just farmers who could benefit. Chinese animal feed producers are reportedly trying to sell back undelivered U.S. corn shipments for a profit, having bought it when the price was lower, as reported by Bloomberg.
Likewise, farmers from other top corn-producing regions like the European Union and Mexico and soy-producing regions like India could also stand see a boost from the cut in U.S. output.
It's not just a cut in supply that has boosted prices. Global cereal demand has grown so close to supply levels that crop prices have grown more sensitive, says Jeet Dutta, senior economist with Moody's Analytics.
"The total supply-demand gap is so narrow, any kind of weather event has a greater capacity to affect the price," he says.
Bad weather across a majority of the U.S., the world's leading corn and soybean grower, means a particularly intense effect on prices. The USDA recently cut its corn yield forecast by 12 percent and its soybean forecast by nearly 8 percent.
Still, it won't be all fat times for foreign farming countries. While farmers abroad might get more for their crops, consumers will pay higher food prices, along with U.S. shoppers.
That can be particularly painful for the many low-income people in emerging economies, says Dutta, who often spend a large share of their income on food.
"In many parts of the world, spending on food is such a major part of the consumer spending bucket. It's not so much in the U.S. Not nearly as much," he says.
Danielle Kurtzleben is a business and economics reporter for U.S. News & World Report. Connect with her on Twitter at @titonka or via E-mail at firstname.lastname@example.org.