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It’s easy to miss amid the drama of Egypt – though the two stories are connected – but the world is in the grip of a full-blown food crisis. According to the U.N., world food prices hit a record high in January, meaning food is now more expensive than it has ever been in real terms since the U.N. first began tracking the numbers in 1990. Grains, in particular, are more expensive than ever, with corn prices up 53% in 2010, wheat up 47% and rice now at its highest level in more than two years. At a time when much of the global economy is still struggling to bounce back from the crisis of the past few years, high food prices could push millions back into poverty and cause millions more to go hungry. “The impact is really being felt, especially in outside the U.S.,” says Marie Brill, the senior policy analyst at the antipoverty NGO ActionAid USA.

Less clear is what’s actually behind the spike in food prices. Bad weather plays a major role – a devastating heat wave in Russia last summer ruined grain harvests and prompted that country to suspend exports, jolting global markets. Excessive heat in the Midwest stunted the corn crop, leading to a 5% drop in production last year. Rising demand for food – especially meat, whose production requires lots of grain and water – in the richer parts of the developing world is straining supplies. And then there’s ethanol, the production of which sucks up grain and cropland that could be used for food. In America, 40% of the corn crop is currently diverted to make fuel for cars. “Ethanol uses 4.9 billion bushels of corn in the U.S.,” says Lester Brown, president of the Earth Policy Institute, an environmental think tank. “That’s enough grain to feed 350 million people.” (Read “Food Prices: Up, Up and Away.”)

Princeton researcher Tim Searchinger, in a column last week in the Washington Post, argued that biofuels are contributing to the food crisis. He noted that biofuels – both corn-based ethanol in the U.S. and biodiesel, which depends on palm oil, elsewhere – now consume more than 6.5% of the world’s grain and 8% of its vegetable oil. That’s up from 2% and virtually nothing in 2004. In a tight world food market, tightened by bad weather, that diversion of grain and oil makes a difference for food prices, especially in developing countries where a rise in the price of staples is passed directly to consumers. (In developed countries, marketing and packaging often make up the lion’s share of food value, cushioning consumers from a rise in staple grains.) “Today, the market is out of equilibrium,” Searchinger wrote.