Surging corn set to fuel widespread price hikes

[Newsjock]

Source: The Globe and Mail

Looking for a good indicator for where food prices are headed? Watch corn.

... The price has already doubled in the last six months and it topped $7 a bushel on the Chicago Board of Trade last week. Since the exchange regulates how high prices can go during each trading session, analysts say corn is on track to break its all-time high of $7.65 a bushel some time this week. And few observers doubt it will stop there.

... The rising price of corn is already finding its way into a multitude of products. Prices for chicken, pork and beef are expected to jump by as much as 4.5 per cent this year. Several companies including McDonald's Corp., Coca-Cola Co., Kraft Foods Inc. and Sara Lee Corp. have said price increases for many of their products are on the way. “Commodity costs represent a major headwind for us in 2011,” PepsiCo Inc. chief executive officer Indra Noovi told analysts last week during a conference call. “Our commodity cost inflation is expected to be in the range of $1.4-billion to $1.6-billion.”

One reason corn prices will stay high is the constantly shrinking supply of the foodstuff. Last week the U.S. Department of Agriculture (USDA) reported that corn supplies are at their tightest level in 15 years. The agency also upped its estimate for how much corn will be used to make ethanol by 8 per cent, putting the figure at a record 4.95 billion bushels. That is nearly 40 per cent of the entire U.S. corn crop.

Read more: http://www.theglobeandmail.com/report-on-business/industry-news/energy-and-resources/surging-corn-set-to-fuel-widespread-price-hikes/article1905386/

[PoliticAverse]

1. Ethanol subsidies = higher food prices. n/t

[msongs]

2. time to remove all price supports and welfare for the corn creating crowd nt

[customerserviceguy]

4. Let's also stop paying people not to grow food

That would be a no-brainer way to reduce spending, and increase our ability to feed the planet.

[truedelphi]

6. Yep, every year there are a handful of stories about

Millionaire movie stars who deliberately buy a "ranchette" just for the tax advantages of not bothering to grow anything on it.

But hundreds of Big Agro people do this also.

[Gidney N Cloyd]

3. Let's build some more new housing developments in primo farm fields

[customerserviceguy]

5. There's a lot of farmland out there

Have you ever driven across the US? I did it in 2007, and a few housing developments here and there are not going to make a major difference.

Do you have a nice home? I do, and I would find it distasteful to complain about others who want that possibility, too.