Will Large Increase in Corn Crop Put Lid on Agflation?
Just as growing concern about “Agflation,” or the steep rise in prices for many agricultural products, is starting to peak, word comes that an expected bumper corn crop may dampen prices by creating a supply cushion. Commodity prices in many categories have been surging over the past two years, including agriculture, where demand for corn to feed the growing corn-based ethanol market has been a bounty to farmers (see Commodity Buyers under Pressure on Many Fronts, as Economy now Confronts “Agflation”). This has in turn put cost pressure on manufacturers and other buyers of agricultural products, as the price for raw agricultural commodities and derivative products such as corn syrup hit record levels. But as typically happens in agriculture, the good times for farmers may lead to over planting, which will increase supply and ultimately reduce prices again. Last week, the US Agriculture Department issued a report estimating the amount of corn planted this year will grow even more than e
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- Will Large Increase in Corn Crop Put Lid on Agflation?
