An expanding drought in Australia's grain belt has already been blamed for contributing to a world food crisis, and now floods in the US midwest, which have devastated the corn crop, are adding to the misery.

The floods in states including Iowa and Illinois have already sent corn prices to new record highs and there could be worse to come.

Most of Iowa, in the US 'corn belt', has been declared a disaster zone. At least three people have died and tens of thousands have been forced to leave their homes.

As well as the human cost, Iowa's Governor Chet Culver fears the economic impact on the largely rural state could be enormous.

"One thing that we haven't talked about, which I'm very concerned about and is critically important, is the damage that has been done to our agricultural sector," he said.

"It is possible you're talking about $US1 billion ($1.06 billion) to just our agricultrual sector, in terms of loss."

Iowa is America's largest corn producer but many of the state's corn fields are under water.

Farmer David Miller says of the 400 acres on his farm, about 330 have been inundated.

"About 150 of those are under anywhere from a couple of inches of water to about four feet of water," he said.

"And you don't know where you're at on the farm."

Mr Miller, who is also an economist at the Iowa Farm Bureau, says at least 3 million acres of croppable land have been waterlogged.

"Really there's probably closer to 4 million when you consider what is not flooded but it's damaged by just excessive rains," he said.

"That's about 15, 16 per cent of the total croppable land in Iowa."

And a lower crop yield from America's corn-belt will drive food prices, which have been on an upward spiral for months, even higher.

Corn is an essential ingredient in many processed foods. It is also used as livestock feed, so the flow-on effects of tighter supplies could be dramatic.

Everything from bread to beef will end up costing more.

Corn prices have already jumped 80 per cent this year alone, and Mr Miller says the floods have added an extra degree of volatility.

"Markets have already reacted somewhat to it. Corn prices have risen about $1.50 a bushel in the last two weeks when the rains continued to come and the water started rising," he said.

"Soy bean prices have also gone up probably about a dollar, a dollar and a half. So, prices have already begun to react."

And with more rain on the way for the midwest, prices are likely to rise even further in the days ahead.