08/15/2011
No recession for corn farmers
Prices of corn have rocketed over the past year by around 200%, as per the chart. This is despite more planting of the crop by the main producer, America.
Reasons for this are a late season drought in USA and the US government’s bright idea to force use of ethanol in fuel production, which is mostly made from corn.
The USDA said the corn surplus could dwindle next fall to only 714 million bushels -- or about a 20-day supply. A 30-day supply is considered healthy.
For all of 2011, the USDA predicts food prices will rise 3 percent to 4 percent. Last month, it estimated that food inflation could slow next year to between 2.5 percent and 3.5 percent. But that figure will likely change because of the damaged crops. The USDA will release its next estimate later this month
Agrilandsales comment
The safest and often the most profitable investing is to back a clear trend. It isn’t speculation to assume that demand for food will grow due to rising population and higher disposable income in many parts of the world. It’s an obvious and huge trend.
Add in to the mix, Governments meddling in the market, such as the USA government giving ethanol tax breaks that have cost taxpayers $23 billion since 2005.
The trend is clear. Rising food prices, particularly corn, which means rising land prices in prime growing regions like North East Bulgaria, which is ideal for corn production.
