Just when you thought food prices couldn't rise any higher, guess what happened today? Corn prices headed toward the roof.
The U.S. Department of Agriculture threw a curve ball of sorts today at Chicago grain traders when it released its annual report on farmer planting intentions. Responding to high soybean prices, U.S. farmers said they plan to plant more of that crop this year than last. That means fewer acres will be devoted to corn. On top of that, the government said we don't have as much corn in storage as many experts had projected.
All of this news couldn't come at a worse time for food manufacturers, ethanol producers, and importers who are all fighting for corn. And, if they're paying more for corn, so will consumers. So, what , if anything can be done?
Grain traders like to say the best cure for high commodity prices is high commodity prices. Some think farmers could slaughter livestock to cut down on the amount of corn they feed cows and hogs. Others think ethanol producers could reduce capacity if corn becomes too expensive. Of course, there is always the chance farmers will switch a few acres intended for soybeans to corn. But these appear to be Band-Aids that could provide only a temporary fix to high corn prices.
Many experts think U.S. policy regarding ethanol needs to be reconsidered. President Bush wants this country to produce about 35 billion gallons of ethanol within the next decade. Last year we produced just slightly more than 6 billion gallons. So, unless we find other sources for ethanol, we'll either starve or miss that goal.
What do you think the answer is?
Comments
"
Corn Prices Pop Higher
posted by Diane
"
That is a goooood one, Diane, a crowd pleaser, and a brain teaser. Your new knee slapper reminds me of my first hot air corn popper, the one I think of every time I hear Bach's Ouverture No. 3 in D major. You know the one I am talking -- Air on the G-rain.
Merry Christmas, Diane
!
Why you didn't move to Omaha? You would be billionaire by now. Oops, perhaps you are one already.
HAPPY HOLIDAYS
HÖ
.
HÖ
.
HÖ
Based on the 86 Mil acres estimated in Today's crop report at 60 bushels/acre yields 5.16 Billion bushels. Each bushel of corn can produce 2.8 gal of alcohol. This yields 14.45 Bil gallons for the entire 2008 crop. When it comes to food vs. fuel, I need to eat.... Substituting corn for oil is not the answer.
People need to learn how to conserve. Passing the buck to industry is not going to do it alone.
- Driving habits can waste 10-20% of fuel.
- Diesel engine powered veicles are 30-40% more fuel efficient.
- Significant fuel is wasted in traffic jams alone.
- All electric and eventually hydrogen fuel cell powered cars offer the most efficient use of energy, but they are still in development.
One thing is sure, we will run out of oil eventually.
Now I need a drink, while I can still afford one!