Why corn prices are at a two-year high
View of a corncob in a maize plantation
TEXT OF INTERVIEW
BILL RADKE: A kind of economic comeback is underway in the nation's farm belt. Corn prices are surging to two-year highs. Reporter Janet Babin joins us live. Good morning, Janet.
JANET BABIN: Good morning, Bill.
RADKE: And what's making corn so hot?
BABIN: Well there are worries that supply of corn is going to be tight, and demand for it is going to stay strong. Less corn to go around could raise prices and corn is used in lots stuff -- food products, it's used to produce biofuels like ethanol, and in some cases it's used to feed livestock, so you have lots of people who need corn, not a lot of it to go around. That's a classic supply and demand situation that could raises corn prices.
RADKE: Right. And how high are prices now?
BABIN: Corn jumped more to $5.56 a bushel, that's the highest price since 2008. This rally for corn really took off on Friday after that government forecast cut the crop outlook. So prices are up 10 percent in just the last two days.
RADKE: How will higher prices affect farmers and consumers?
BABIN: The higher prices can be good for farmers, in that they have the potential to increase the value of farm land, and they could facilitate purchases of new farm equipment. But also you have to think of what what price the farmers pre-sold their corn for in futures markets. They might be locked into a price. And if higher corn prices up the price of livestock feed, then farmers are going to have to pay more to feed their animals. That could raise the price of meat for us at the supermarket and throw a wrench into the biofuels industry, too. That would have to pay more for raw materials.
RADKE: Janet Babin reporting live for us. Thank you, Janet.
BABIN: You're welcome, Bill.