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Will Food Prices Jump After The Heat Wave?

The forecast for corn yield, the bushels of corn harvested per acre of planted, fell to 123.4, a drop from last month’s forecast of 146 bushels per acre. The continued slide in projected yields is particularly sharp considering that this corn crop was the biggest in more than 70 years. The yield is projected to be the lowest since 1995. The big drop in corn production means, in the words of the report, a “sharply higher price outlook” for corn. The projected price for corn soared to $7.50-to-$8.90 per bushel; last month’s projections were $5.40-to-$6.40 a bushel…
But what does this mean for food prices? There is not any new federal government data until the end of this month, but “higher corn, wheat, and soybean prices will all get transmitted to consumers over the next several months,” says USDA Chief Economist Joseph Glauber. The first increases are expected to be in vegetable oil, while beef, pork, and poultry—all of which use corn and soy for feed—will take longer.

One response to “Will Food Prices Jump After The Heat Wave?

  1. Russell August 17, 2012 at 6:44 pm

    Wheat Prices were higher in 2008 than today. Maybe food prices really are just a function of oil prices.

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