Posted by Brian
The economy continues its slump and people are out of work, but the price of goods and services continue to rise. Oil at nearly $100 a barrel and food prices beginning to soar. Even though a recent report stated that ethanol is a bust, producers are going to increase their use of corn for its production. The combination of higher food commodity prices, coupled with higher oil prices, will significantly affect the price of food at the supermarket. How about the government get the hell out of the way, issue some drilling permits, get some refineries built, stop growing crops for fuel and go back to growing crops for food?
Prices Soar on Crop Woes
By SCOTT KILMAN And LIAM PLEVEN
Evidence of tightening global food supplies grew as the U.S. Agriculture Department cut its estimates for global harvests of key crops and raised some demand forecasts, adding to worries about rising food prices.
Prices of corn and soybeans leapt 4% Wednesday and wheat gained 1%, continuing the broad rally in commodity prices that began in June. With yesterday's gains, prices of corn futures contracts are now up 94% from their June lows; soybeans are up 51% and wheat is up 80%.
The USDA's revisions reflect the impact of dry weather in South America and floods in Australia, which have compounded supply constraints that first started to emerge in the middle of last year, when a drought in Russia ravaged that country's wheat fields. The agency also cut estimates for U.S. harvests of corn and soybeans.
At the same time, demand is increasing. The USDA said ethanol producers likely will increase their use of corn, and consumption by emerging market countries continues to be strong. READ MORE HERE--->