Food inflation faces more upward pressure after the US government on Friday revealed that American farmers had barely increased their sowing of cereal crops in spite of record prices.

The US agriculture department also warned of persistently low inventories, with wheat stocks at the lowest since 1947, and a massive 20 per cent reduction in corn stores.

Analysts believe a further wave of food inflation is on the way after the price surges of last summer.

The inventories numbers were “absolutely shocking”, said Greg Wagner, an analyst at Horizon Strategies in Chicago.

“The US is going to be at the mercy of mother nature and weather conditions will be of excruciating importance this year as we really need good growing conditions,” he added.

The agriculture department said farmers had increased their wheat acreage by a meagre 3.6 per cent to 46.6m acres, less than half of what the market forecast was needed to lower current record prices. Wheat prices recently hit a record of $10.09½ a bushel, more than doubling the $4.50 of a year ago.

High-quality red-hard wheat, used to make bread, even suffered a decline in acreage. The agriculture department blamed the decline on dry conditions during the autumn sowing.

Gavin Maguire, of Iowa Grain in Chicago, said that lower winter wheat seeding meant the agricultural market faced a three-way fight between corn, soyabean and spring wheat for extra acreage. “Cereals prices will need to rise even further to see two of those three crops winning the acreage,” he said.

In Chicago, wheat prices for the next crop in July 2008 surged by the 30 cents daily limit to $8.06 a bushel. Corn prices hit a fresh 11-year high of $4.95 a bushel, jumping by the 20 cents daily limit. The options market, not affected by the daily limit, put prices above $5 for the first time since July 1996. Spot soyabean prices surged to an all-time high of $12.91¼ a bushel.