The USDA now says the corn crop this year will be ten percent below last year's, thanks to the Noah-like rains in the Midwest. Inventories are expected to be at their lowest level since 1996!
This as livestock producers, food manufacturers, and ethanol plants are all fighting to grab as much corn as they can, but paying three times the norm for it. July corn futures this week touched a record $6.73 a bushel. Corn is making gasoline look cheap.
I emailed John Hoffman, who grows both corn and soybeans out of Waterloo, Iowa. I visited Hoffman's farm in late April as rains were delaying his planting plans. He said at the time that farmers in that region needed to get corn in the ground during the first half of May to maximize yield. So what happened? Hoffman says, "Probably 95 percent of the soybeans and corn in our county are planted but they are at least two weeks behind in physiological maturity. Crop protection, chemical and nitrogen fertilizer application, are also far behind schedule." Hoffman says this reminds him of the rains of 1993, which lasted until July.
That is not good.
Cattle ranchers can turn to other forms of feed, like rangeland (if they can find it--we have a drought in California). But for pork producers like Smithfield Foods and poultry producers like Tyson and Pilgrim's Pride, staying profitable just got a lot harder.
Eventually, of course, this will be passed through to you the consumer. With food and fuel costing so much, maybe we'll finally get in shape as a nation by eating less and walking more!
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