Animal feed made from soybeans is the main food source for poultry and livestock. Wang Hongyue, a farmer from Cangzhou, Hebei province, who raises more than 30 pigs, said the price of bean pulp has risen recently and he has now reduced the amount he uses in animal feed, replacing it with corn powder to save money.

"The price of corn is also rising, but the price of pork is still very low. The more pigs I raise, the greater the loss I suffer. It's really a headache," he said.

"The corn price increased to 2,400 yuan recently from 2,300 yuan a metric ton in July," said Liu Xin, manager of the Yushu branch of Dalian Northern International Grain Logistics Co. "As the US drought continues to expand, I think the price may rise, but the room for increase is limited."

The harvest season is near and the market is changing every day. No one wants to take the risk of storing large amounts - price reversals, the high cost of storage and interest rates could easily drive an enterprise into bankruptcy, he said.

Li Hongquan, who owns a chicken farm in Liaoning province, is of the same opinion. "Bean pulp costs 4,050 yuan per metric ton, but this time last year it was only 3,000 yuan. The price hikes have eaten away most of my profit," he said.

Indispensable foodstuffs

The surging price of meat, eggs and milk has also troubled Qin Fu, director of the institute of agricultural economics and development at the Chinese Academy of Agricultural Sciences. "They are indispensable foodstuffs on ordinary people's tables. The central government should increase soybean imports in the short term to avoid price fluctuations. But in the long run, we need to find more substitutes and improve the variety of cereal plants to gradually eradicate an excessive dependence on the international market. It's worth researching," he said.

Li Guoxiang wasn't convinced that increasing import levels would be a good solution to the problem and suggested that the authorities should wait before implementing such a move. He believed that the price hike in cereals may have been caused largely by speculators using natural disasters to manipulate the market.

"The failure in grain output is still at a predictive phase generally and the full market impact may not be seen for several months," he said, "Severe measures should be taken against people who are forcing prices higher."

He also suggested that the government could offer subsidies to help those on low incomes and farmers whose crops have been ravaged by pests.

Zhang Guijin, deputy director of Siping National Grain Depot in Jilin province - directly managed by the State Council - said the depot hasn't received orders to increase storage or raise the amount distributed to reduce price fluctuations. "As far as I can recall, the country has only once ordered an increase in temporary grain storage. That was in 2008, during the global food crisis," he said.

"The impact of the US drought on China will be very slight, so people don't need to worry."

Contact the reporter at hena@chinadaily.com.cn

Han Junhong contributed to this story.