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on December 5, 2011

Mexico corn production cut due to extreme drought

Lack of rain worst in 70 years, has affected 70% of country

Mexico's worst drought in 70 years has caused the country's government to cut its corn forecast a second time to 20 million metric tons, compared to a previously revised estimate of 23 million metric tons, according to reports.

Tens of thousands of acres of crops have already been lost in the drought that has affected nearly 70% of Mexico, and 450,000 cattle have died. Dams are at 30% to 40% capacity. The Mexican government has so far set aside some 1.6 billion pesos (US$113 million) in aid to cover losses. "It's a troubling situation, and is more worrisome because the rainy season is over," said Felipe Arreguin, deputy director of the National Water Commission. "The hope is that by June it starts to rain."

If the drought continues, analysts say authorities will have to raise food imports to cover lower domestic production.

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