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[Livingontheland] Crop prices may rise, pushing up food costs
- From: "Tradingpost" <tradingpost@lobo.net>
- To: livingontheland@lists.ibiblio.org
- Subject: [Livingontheland] Crop prices may rise, pushing up food costs
- Date: Thu, 11 Jun 2009 18:59:43 -0600
Crop prices may rise, pushing up food costs
http://www.chron.com/disp/story.mpl/headline/biz/6470114.html
Crop prices could rise this year because of dwindling supplies of U.S. corn
and soybeans, raising fears of grain shortages and higher food costs for
consumers.
Reserves from last years harvest are low with soybeans at their
shallowest level in more than 25 years the Agriculture Department said
Wednesday. And this years crop isnt expected to replenish grain bins.
The reserve stocks have been depleted by U.S. grain exports, along with
domestic demand for crop-based fuels like ethanol and biodiesel. Global
markets have been left with a thinner cushion of surplus. The tightening
supply could start to raise crop prices, which had been kept down by the
global recession.
The dynamics for higher food prices are already in place, but they are
being masked by problems in the larger economy, said Greg Wagner, senior
commodity analyst with Chicago-based AgResource Co.
Crop prices have risen steadily this spring since collapsing after last
falls financial crisis, when global demand sank along with the economy.
Still, prices havent come close to last summers all-time highs.
Higher grain prices could hurt already battered food companies like General
Mills and Tyson Foods. Theyve had to pay more for ingredients as prices
for corn, wheat and soybeans have risen. Prices at the store could climb,
too, as food producers pass on their higher costs to consumers.
There are 110 million bushels of soybean supplies left from last years
U.S. harvest, down 20 million from May, according to the USDAs World
Agricultural Supply and Demand Estimates.
Thats the lowest level of surplus soybeans for a June since 1983, Wagner
said. And the demand for grains is much higher today. In 1983, the U.S.
market required about 1.9 billion bushels of soybeans to meet demand. Today
it needs 3.7 billion, he said.
It just shows you how extremely tight this is, Wagner said.
Because most of the soybean harvest is used to make animal feed, its prices
affect meat producers. Soybeans are also used to make many processed-food
goods sold by Kraft Foods, ConAgra Foods and others.
- [Livingontheland] Crop prices may rise, pushing up food costs, Tradingpost, 06/11/2009
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