The Consequences of the Mississippi Flood and Ethanol

The price of corn hit a new record price today as the 2011 harvest has been compromised by the Mississippi River floodand the government’s unceasing penchant for making ethanol. We will be reading more stories on the continued consequences on the flood’s impact on other agricultural products including wheat and rice.

What does this mean to the American consumer? Higher costs for cereal, soft drinks and corn fed livestock. What does this mean for the rest of the world?

That is dependent on the actions of our government. If the administration does not export our agricultural products in the face of domestic shortage, the shortages of food in third world countries will be blamed on the United States. We will have to wait and see if we will be able to feed the world.

David DeGerolamo

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Corn Hits Record on U.S. Weather, Demand

Corn surged to a record approaching $8 a bushel on signs that global inventories will drop as adverse weather slashes acreage in the U.S., the world’s top producer, and demand rise for livestock feed and ethanol.

Worldwide stockpiles will be 111.89 metric million tons before the 2012 harvest in the Northern Hemisphere, the U.S. Department of Agriculture said yesterday. That was down from 129.14 million forecast in May and 117.44 million that the agency says will be in storage by Oct. 1. U.S. supplies before the 2012 harvest were estimated at the lowest since 1996.

Prices have more than doubled in the past year as wet weather limited the size of the 2010 U.S. harvest. Flooding in the past two months delayed planting and threatened this year’s crop prospects. The rally is boosting expenses for meat producers including Tyson Foods Inc. and makers of grain-based ethanol such as Poet LLC. Global food costs climbed in nine of the past 11 months, reaching a record in February.

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2 Responses to The Consequences of the Mississippi Flood and Ethanol

  1. RJ says:

    You should see the price of animal feed where I work. It has doubled in the last year.

    We are driving around, burning our food supply.

  2. Anthony Wick says:

    If the administration does not export our agricultural products in the face of domestic shortage, the shortages of food in third world countries will be blamed on the United States. That’s a pretty big burden to put on a country. We have plenty of our own to deal with. It’s important to note both domestic and global trends when making commodity decisions. To make an educated investment tactic regarding this commodity you need to know your options. I never realized corn products
    are such a diverse commodity. If you are thinking of getting more information on this topic, I would recommend looking at Agriculture.com directory. They offer a truly comprehensive directory of expert marketing commentaries available, including strategies from farmers and marketing firms, crop technology, daily weather forecasts, and other useful info. While I now work for them, I can honestly say that I have never seen a more complete directory or one that has more useful data on this topic. It could be a worth while and profitable decision on your part.

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