Shucks! High corn prices drive up grocery bills
Sat, 07 Jul 2012 00:13:35 GMT —
It's a situation we've seen go from bad to worse -- the drought.
It has hurt farmers and ranchers, our water supply, and now the average consumer. Crops are drying up and that's raising the cost of many different kinds of produce as supply tries to keep up with demand. It's corn, however, that's doing the most damage.
"Corn production has been affecting the nation's food supply for quite a long period of time," said United Supermarkets Director of Communications and Public Relations Eddie Owens. "It's an ingredient in so many things."
That includes products like bread, cereal, syrup and corn tortillas. As long as the price of corn is up, you'll be paying more for those items, too.
"When you go into the grocery stores, you may be seeing those prices passed on, to the consumer basis," explained Futures and Options Broker Donna Hughes. "Probably close to three to four grocery items are in some way corn-related."
Many may not realize it, but even the price of beef is affected by corn production and prices. Farmers are paying more to keep their cattle fed since corn is a main ingredient in many kinds of feed.
"We've seen so many folks either reduce their head or get out of the business entirely just because it's become too expensive to raise cattle and we see that at the grocery store unfortunately," added Owens.
It doesn't stop there. Corn is also used in the production of ethanol and has been for several years.
"There's been a lot of talk of ethanol plants shutting down because it just doesn't get cost effective so again, with the higher prices of corn now you're talking about the energy industry and again, it'll go back to the consumer," said Hughes.
USDA comes out with a report on ending stocks and yields next week and industry experts predict it will come in around 160 bushels per acre for the corn. Some say that's pretty high, but in other parts of the country those yields could be much lower. Yields in states like Illinois and Ohio have been predicted to be coming in around 120 bushels an acre.