Tess Vigeland: Most of us don't particularly enjoy wet weather. But it's far more than an inconvenience in world grain markets. Today, corn futures hit a record high. The U.S. Department of Agriculture says rains and flooding will slash into supplies. It means slightly higher prices at the grocery store here, but real trouble in other parts of the world.
From the Marketplace Sustainability Desk, Adriene Hill reports.
Adriene Hill: The USDA report (PDF) previews supplies of all types of grains. I ask Dr. Joe Glauber, the department's chief economist, for the headline.
Joe Glauber: The corn market just got tighter.
Now don't get bored. Not yet.
Corn supplies matter to nearly everything we eat. And supplies are down -- not because we're growing less; even with the floods, we're on track for record yields. Supplies are down because we're using more: to feed our cows and pigs and to fuel our cars.
Glauber: Corn production has increased over the last couple of years, but so has demand. Because of that, stock levels have declined.
The feds predict we'll have about three weeks of corn on hand.
Randy Mittelsteadt: Essentially scraping the bottom of the barrel at the end of the year.
Randy Mittelsteadt is analyst for RJ O'Brien, a commodities trading firm. He says he thinks today's record corn prices are reasonable. And he says:
Mittelsteadt: If we have another crop problem like we did last year, the price levels that we are seeing right now, quite frankly, will look very nice four or five or six months down the road.
The U.S. produces about 40 percent of the world's corn. When the price of corn goes up here, it goes up everywhere, which can be a problem for developing countries.
Homi Kharas: Most poor people spend large amount of their budgets on food. In some cases, up to 60 to 70 percent.
Homi Kharas is a researcher at the Brookings Institution. When prices of food staples jump:
Kharas: They basically can't afford to buy as much food and they go hungry.
The U.N. predicts high and volatile food prices into next year (PDF). The best hope for food price stability in the short term, is something no one can control: good weather.
I'm Adriene Hill for Marketplace.