Get That Expensive Corn Out of My Face

Corn.  Everyone loves it.  It comes in many different varieties.  Cream corn, sweet corn, Silver Queen, Golden Bantam…and the most popular…corn on the cob.  The problem.  It’s too expensive!  The worst drought since 1956 took its heaviest toll on those sweet little kernels we love. World corn prices jumped over 55% in a six week period in July, 2012, marking the sharpest rise in centuries.  The Chicago Corn Futures reported a new price record in 2012, over $8 a bushel. You may say, why does it matter if corn is so expensive.  It’s only one item.  What you’d fail to take into account is that corn is used in ¾ of all supermarket products.  What you might say next is, well that was 2012.  It’s not 2013 and this is old news.  What you’d fail to recognize is the long-term effects of a diminished supply of corn worldwide.

No Feed for the Animals

The staple products most farmers use for their herds is a corn-based feed. Decisions in the dairy, poultry and beef markets are all driven by the price of corn.  It’s a cheap way to feed and plump a herd, while still turning a profit.   While we complain that prices are too high at the grocery store, farmers all across the country are opting to slaughter their herds prematurely because they can’t afford the high cost of corn feed. What this means for the immediate future of beef is the price should go down.  There will be a plentiful  supply in the first half of 2013.  What it means long term is prices for every food will go up.  Why?  Because there will be shortages in every sector of the food chain.

Corn is one of the most fundamental catalysts for increasing or decreasing the food supply because it’s in virtually everything. When corn doesn’t grow or is damaged, it slows the growth of every other food industry.

We sold it all away

Most countries keep a supply of 1-3 months of corn storage to keep their countries food supply consistent.  Historically the U.S. has exported a tremendous amount of corn products, as it did in 2012.  Foreign countries are prepared for 2013 and have purchased their normal amounts of U.S. feed.  The concern for the U.S. in 2013 is that because we’ve exported our “normal” amount of corn, it leaves less of a store for us at home.   We used much of our corn stores in the sale of other countries.  What has normally been enough corn left over to keep prices reasonably low, this will no longer be the case.  As we seek to buy corn back from international markets, the price will go up with demand.  Bottom line…the U.S. is going to see much higher prices for corn.  Because corn is the foundation of many other sectors, the price at the grocery store keeps going up.  Hang on for the ride.

When you understand why corn prices affect everything else you buy, it highlights two problems that are getting increasingly worse.  One, food is getting more expensive each week.   Two, food supply is going down which drives the price even higher.  We harp on these two fundamental facts in each on of our blogs to drive home that the world is a scary place when it comes to food.  In one bad growing season for corn, the entire world supply is affected.

Our best suggestion to prevent being susceptible to the problems that aren’t going away is to take control.  Be self-sufficient.  Grow your own food.  It’s delicious and nutritious.  It’s a way to live or a back-up plan.  Either way, a garden of your own insulates you from the fluctuations that are only going to get more severe in the future.  Survival Seed Kits, which contain fundamentals like Golden Bantam Corn help to offset or eliminate the cost of purchasing food.  The other majoy benefit to at least owning a Seed Bank is to know that if it becomes to scarce or two expensive to afford, you have a way out…a way to survive.  Watching the price and supply of corn is a great way to gauge the prices and supply coming in the following year.  This is why we predict that 2013 will be a year of more price increases in everything that you buy.  2012 was a terrible year for corn, which means 2013 is where you see the aftermath.  Prepare for you and your family now.  Seed Kits. Survival.  Safety.

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