Corn Reserves Hit Over-15-Year Low, Could Raise Prices for Food, Ethanol
The U.S. Department of Agriculture is reporting that reserves of corn have hit their lowest level in over 15 years.
The high demand for corn could put upward pressure on food prices in 2011.
Demand for corn in the ethanol industry is up 50 million bushels after record-high production in December and January, according to the USDA.
That has left the United States with the lowest surplus of corn since 1996.
Scott Gerlt, a crop analyst with the University of Missouri, said high corn prices could increase the cost on everything from ethanol to food and feed.
"The corn market is definitely a changing market," Gerlt said. "With ethanol policy we have a lot more demand and so we are going to have a lot more pressure on prices. Because even though we have a lot of supply there's just so much demand a lot of that supply is getting used up and we're just not left with much at the end of the day."
Corn prices have already doubled in the last six months, rising from $3.50 a bushel to more than $7 a bushel.
(Photo courtesy of Artotem/Flickr)