Fears over the rising cost of food escalated yesterday as the price of corn hit a record high after bad weather.

The increase in the price of corn came as the US Department of Agriculture (USDA) forecast a jump in US food prices, expected to rise by 5 per cent this year - the largest increase since 1990 - led by higher prices for bread, biscuits, cereal and bakery products.

Meat prices are also expected to drive food price inflation next year, the USDA said.

The price of a bushel of corn for delivery in July 2009 rose to a high of $7.31 during trading yesterday, up from $6.73 the day before.

The surge was triggered by the USDA cutting its forecast for how much corn it thinks will be produced this year to 148.9 bushels per acre, down from its May estimate of 153.9 bushels.

The cut in the forecast was due to bad weather in the US, the world's biggest corn producer, where flooding has harmed crops. There have been prolonged rains in the Midwest, where Iowa and Illinois produce a third of US corn.

The price of corn has risen by around 51 per cent this year because of strong demand for food, feed and ethanol fuel.

Limited corn supplies are likely to result in higher prices for other crops, such as wheat, and lower chicken and pork production as the animals eat the feed.

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