Governor of New York dropped $85,000 on that one.
Posted on 03/31/2008 5:32:46 PM PDT by Brilliant
WASHINGTON (AP) -- From chicken nuggets to corn flakes, food prices at grocery stores and dinner tables could be headed even higher as farmers cut back on the land they're planting in corn this spring.
Corn prices already are high, and a drop in supply should keep them rising. Combine that with the huge demand for corn-based ethanol fuel -- and higher energy costs for transporting food -- and consumers are likely to see their food bills going up and up.
Farmers are now expected to plant 86 million acres of corn this year, the Department of Agriculture predicted Monday, down 8 percent from last year, which was the highest since World War II.
Corn is almost everywhere you look in the U.S. food supply. Poultry, beef and pork companies use it to feed their animals. High fructose corn syrup is used in soft drinks and many other foods, including lunch meats and salad dressings. Corn is often an ingredient in breads, peanut butter, oatmeal and potato chips.
Corn components are even used in many grocery store items that aren't edible -- including disposable diapers and dry cell batteries.
When the corn that goes into those products goes up in price, increases eventually can be passed along to consumers.
And corn prices have skyrocketed in recent years, almost tripling since 2005.
Corn began its latest surge in early 2007, rising from just over $3 per bushel to record prices above $5 per bushel today. If prices hold steady or rise, the average yearly price per bushel in 2008 will be the highest ever, according to USDA statistics.
Corn climbed higher Monday following the release of the USDA report, with the most-active contract briefly hitting an all-time record of $5.88 a bushel on the Chicago Board of Trade before settling at $5.6725 a bushel, still up 6.75 cents.
They have been pushed along by the burgeoning ethanol industry, which turns the crop into fuel, and by rising worldwide demand for food.
"People who are working families, just barely making it and already paying higher prices for gas and home heating oil are going to be shot in the pocket by higher food prices," said Carol Tucker-Foreman of the Consumer Federation of America.
Richard Lobb of the National Chicken Council said recent increases in the cost of corn feed have been absorbed by larger chicken companies, such as Pilgrim's Pride Corp. or Tyson Foods Inc., that provide feed to poultry farmers. But that could change.
"At a certain point we have to readjust and get back to square one," Lobb said. "The only people who have money ultimately are consumers."
Tucker-Forman of the Consumer Federation of America and Scott Faber of the Grocery Manufacturers Association both say rising food prices could be stemmed if Congress would pull back subsidies for the ethanol industry.
The number of ethanol plants has almost tripled since 1999 and more are being built, according to the Renewable Fuels Association. Such plants could gobble up more than a quarter of the country's corn crop.
"Food prices being driven by the food-to-fuel mandates will most significantly affect the working poor," Faber said.
Matt Hartwig of the Renewable Fuels Association said the higher prices can't be blamed only on the ethanol industry.
"There are a host of factors contributing to higher corn prices -- surging global demand to feed people and livestock, a weak dollar encouraging exports, and rampant speculation -- that have a far greater impact than America's ethanol industry," he said.
According to the Agriculture Department, corn planting is expected to remain at historically high levels but may dip this year because of the high expense of growing corn and favorable prices for other crops, such as soybeans.
As many farmers have switched, soybean planting is expected to be up 18 percent this year, at almost 75 million acres. Farmers are also expected to plant more wheat this year, which could lower retail prices for pasta and bread.
Soybeans for May delivery fell the 70-cent limit Monday on the Chicago Board of Trade, settling at $11.9725 a bushel. Still, soybean prices are up 45 percent since March 2007.
The Department of Agriculture report is based on sample surveys of 86,000 farm operators in the first two weeks of March.
Terry Francl, a senior economist for the American Farm Bureau Federation, predicted Monday that corn prices will continue to rise but he said consumers shouldn't panic just yet.
Many farmers will take a look at the report and decide to plant corn instead of other crops, he said, and weather conditions could also change things.
"We're going to have to wait until we go through the spring planting season," he said.
John Hoffman, a soybean grower from Waterloo, Iowa, and president of the American Soybean Association, said farmers will always find ways to grow more crops to stabilize prices. Though high prices are good for the farmers, there's bound to be a correction, he said.
"There's an old saying out on the farm that the cure for high prices is high prices."
Libs always wanted to keep the poor “down on the farm” anyway.
Tell me about it. we’ve got a bunch of RINOs/repubs in my state pushing for it because they or their relatives are in the ethanol refining business. Total conflicts of interest.
sw
If the weather in the midwest doesn’t improve soon,there won’t be as much corn regardless.Farmers around here are already switching to shorter maturity hybrids(read that as reduced yield),or switching to beans.And with fertilizer nearing 1000 bucks a ton,I’m hearing more talk of reducing planting or just sitting this year out.
This will probably end up being a Fimbul Winter as far as fruit trees are concerned ~ but the South will make up for the shortage (except for apricot preserves).
If you get really panicked try fancy beans.
People better wake up. The Feds want to maintain "stable" prices. That means shortages.
The weather may be fine whereever you are but here it’s mega wet with more rain in the forecast.This time last year all wheat had been top-dressed -this year none has,not one acre!
As long as there is a dime of government subsidy to be had, but in the case of corn, they have killed the goose that laid the golden egg in many ways. They have driven the cost of fertilizer and diesel so high they can no longer come out and it is a better deal to take the government doll and not do the work.
I know that.
sw
A 29.6% drop in wheat futures in 3 weeks is pretty significant, regardless of timeframe.
Higher corn prices will result in more corn production until supply and demand balance again.
Burning food is the stoooopidest liberal idea yet.
Dear Farmer Dean if you really have someone who is going to “sit this year out” please contact me. Of course it needs to be soon as planting time is here (or past or soon to be depending on your location) but I will offer them $1 per acre for a lease (100 acre min.). That’s better than they get doing nothing.
If you still have that issue, perhaps you would be good enough to send it along to Jorge Bush. I think his subscription expired before this issue came out.
Soybeans going down because cool,wet weather encouraging bean planting at the expense of corn. Wheat down due to expectations that crop failures of last years won’t repeat. Corn up due to bean planting up and corn planting down.
I think the coincidence of corn with oil is just that: coincidence.
Governor of New York dropped $85,000 on that one.
I noticed when I fueled up (first time in two and a half weeks) that the regular unleaded was touting up to 90% ethanol with a little green sticker. That crap pisses me off. I’ll look else ware or pay for mid-grade just to stay away. I refuse to contribute to the inflation caused by turning perfectly good food into energy via a multi-stage process that guarantees that fuel is being wasted and strains the wallets of the average person by increasing food prices. The same lie is being told regarding electric cars. First, the energy is likely delivered from a coal burning or natural gas power plant. Second, there is a great deal of energy lost in transmission in the form of heat, sound (note: that buzzing and crackling under the high-tension wires is energy being wasted in the form of both heat and sound) and mechanical conversion which involves both heat and sound. Finally, you dump the energy into an inefficient storage device which once again wastes energy itself charging and then delivering the energy by conversion through the wiring and stators to the drive train to create motion. In the end you get to pay to replace and dispose of a huge toxic battery at about half of the value of the transportation device (car) just to appease the itch in Al Gorical’s pants. All hail Gia and the wonders of stupidity. Real efficiency and love for mother earth is a potato(e)(oe)(oeoeooooooe) cannon custom formed to ones body and 1/4 cup of gasoline. Pour deadly fuel, insert self, tilt at a 45 degree angle for maximum efficient distance. Set to 25 degrees if you only intend to go to wal-mart. Enough.
I’m sure that anyone who chooses not to plant already has some renter lined up to pay the going rate locally.We are not planting corn this year,we intend to concentrate on our horse hay business and wheat.
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