Amid news that the USA drought continues to expand (see http://www.bloomberg.com/news/2012-07-30/corn-ratings-worsen-as-u-s-midwest-drought-expands-usda-says.html) it's time to note that no one should hope for a calamity even though NZ farmers will stand to benefit. Whereas the drought will increase the cost of feed grains, which will in turn increase the costs of production of US and EU dairy and beef farmers, which will further reduce global beef and milk production and will result in higher dairy commodity prices, let's hope a complete food supply disaster is avoided.
Firstly we should be concerned that even though price rises are good, people still need to be fed. And secondly, at the extremes, who knows how governments will react. The Arab spring uprisings started with concerns over food prices after all.
Lets hope there is an end to the drought in the next month or so; crop yields are already so depressed that prices must rise. We don't need more riots!