Didn’t you just know this was going to happen? The corn belt has experienced massive flooding, record heat, and drought, all in the same year. The Missouri River is still flooding as I write. See map of the corn belt from Wikipedia below:
It was no surprise to learn that corn futures have reached a new record high of $7.84 a bushel (as of June 10) after the USDA forecast for corn was released yesterday. For the first time ever, corn is trading higher than wheat. See Bloomberg’s report this morning.
Fertilizer sales and seed sales are expected to rise, so the fertilizer and seed industries stand to gain, but the rest of us stand to lose. You may think high corn prices won’t affect you in any way, but stop and think for a moment about how many corn byproducts we all consume on a daily basis. High fructose corn syrup is used in thousands of products, and so is corn starch. We use corn for animal feed, and especially now, during times of extreme drought, it’s especially in high demand. Chickens eat corn. Cows eat corn. Our automobiles “eat” corn, (ethanol).
It also appears that corn supplies are tight worldwide. Marketwatch reports that Mexico has purchased 800,000 metric tons, with two-thirds of that purchase set for delivery in the 2011-2012 marketing year. This is significant because a purchase that far ahead of time, which is pretty much unprecedented, indicates a belief that corn supplies will remain tight for the foreseeable future.
On a brighter note, soybeans seem to be plentiful, and their price has fallen. Let’s just hope no one figures out how to make ethanol out of soybeans.
Meanwhile, the drought continues. One of my fellow bloggers, The Cattlebaroness, has just posted some pictures of her farm, and if you’ll scroll down, you see a photo of sweet corn in need of rain. Maybe it’s time to develop drought-resistant strains of corn. Maybe it’s also time to pray for rain.