Stalking corn prices
A corn crop failed to mature in a field near Perryton, Texas. A severe drought has caused most dry-land crops in the area to fail and forced farmers to abandon some fields in order to conserve their limited resources.
Kai Ryssdal: Do this for me, would you, as we get going today? Forget about Europe, and the stock market and LIBOR and the price of a barrel of crude, and consider instead: corn, and the future of the American economy. At the Mercantile Exchange in Chicago today, traders looked at the weather forecast for the Midwest -- not a whole lotta rain coming -- and promptly sent corn prices up another three percent.
Sally Herships has the Marketplace Farm Report.
Sally Herships: Not to be too corny, but corn really drives our economy. From cereal to animal feed, to the gas in your tank, which is about 10 percent ethanol and made from corn.
Tom Pirko: I think the misnomer is that we are a gas economy or an information economy. If you want to really get right down to it, we’re almost a corn economy.
Tom Pirko is President of Bev Mark, a food and beverage consulting company. He says as corn prices go up, consumers can expect to pay more. From the obvious -- soda made with corn syrup, to the disposable cup you drink it in, even to your toothpaste. Corn is also a feed for our food
Herships: Tell me how many cattle you have.
Bonds: M’am that’s kind of like asking how much money we’ve got, but we run tens of thousands in a year.
Pete Bonds is with the Bonds Ranch -- in Saginaw, Texas. The drought hit his herd hard last year.
Bonds: It just flat forgot to rain.
So, Bond’s ranch had to sell off 50 percent of its cattle. That’s what other ranchers are facing now. No grass and skyrocketing corn prices.
William Tierney is chief economist at AgResource, a market advisory firm.
William Tierney: You can’t see the light at the end of the tunnel, so I’m going to cut my losses now, before they lose weight, before they lose condition.
Which means one silver-ish lining for steak lovers. The price of corn may be going up, but the price of beef is coming down.
In New York, I’m Sally Herships for Marketplace.