Midwest farmers in the U.S. Corn Belt are getting wacked with a double whammy this summer: no rain and 100 degree temperatures. This is the perfect storm as corn enters the critical pollination phase of the growth cycle. There’s talk of comparisons to the 1988 drought which cost U.S. farmers 45 percent of their crop. Smaller crops mean higher prices and guess who pays – you do, of course.
In spite of planting over 96 million acres (the largest crop in over 75 years), corn prices are racing the thermometer toward record levels. And it’s not just corn; soybeans and wheat prices (think bread) are soaring like condors over heat thermals as well. That means even the peanut butter and jelly sandwich you’ve been eating because you lost your job during the recession is going to cost you more.
Corn prices have increased almost 50 percent since mid-June, only a few weeks ago (see the above chart). The Ag research analysts are rolling out their usual explanations attributing the problem to La Niña and El Niño weather patterns and the global warming alarmists are saying I told you so. But there are further complications exacerbating the problem: other global corn producers including Russia, China and Brazil are looking at potentially similar poor harvests. With more than seven billion hungry mouths around the world to feed, the grain markets may make even the oil markets look stable.
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