Sunday, February 13, 2011

According to an article at Usa Today food prices could be on the rise because of natural calamities and congressional mandates. We may not see it on our grocery bill in the US yet but other countries are already feeling the droughts in Russia, China and Argentina, and the flood in Austalia. The US Congress is also contributing a longer term increase of food prices by mandating that 24% of corn grown in the US be used to create ethanol. The mandate combined with a low corn yield this year has put the US field-corn reserve at the lowest it has been in 15 years. The shortage of "eating corn" has caused the price per bushel to almost double from $3.49 in July to $6.10 in January. The price has been predicted by analysts that the price per bushel will continue to rise to $6.90 by the end of the year. The frightening thing is that corn is made into high-fructose corn syrup, our most common sweetener. The corn syrup is found in a huge amount of processed foods, so a shortage of food could cause a widespread increase in prices. So far the Produce companies have been able to hide the shortage of corn by cutting expensives and even making packages smaller. But after earnings reports came in for last quarter a majority of companies have stated that they will raise prices.


Easton said...

This is an interesting topic to discuss because of its meaning to our economy. Maybe its just me but I never really thought about how problems such as a shortage in the yield of corn can be so devastating to our country. Like Whit said corn has become our most common sweetener and a major part of all processed foods. With the government putting more and more money into investing on renewable energy resources will we see more shortages in the future?

Garrett T. said...

It is surprising now that I think about it that corn syrup is the most common used sweetener. The shortage of corn is going to effect everyone and everything sadly. With ethanol in our gas, this will definitely not help gas prices in the least bit. It's already bad enough trying to get gas from the middle east. I'd say its about time to start running on hydrogen fuel cells for cars or something as an alternative resource that way we don't have to turn 24% of our corn into ethanol.