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Food Prices Set to Rise Due to Record High for Corn and Soy

Note: This article may contain commentary or the author's opinion.

Prices of corn and soybeans have hit records. The price of soybeans which are given to cattle and chickens have rose 26% this year. Its futures are trading above 17 United States dollars for a bushel. The last time soybeans traded at this high of a price was in 2012. Corn futures have also risen 37%. They are trading at $8 a bushel again just like back in 2012. These are just the latest in raw materials reaching new highs. Previously wheat, oats, and vegetable oils had reached new highs this year. Global food prices are set to rise to an all-time high this year.

Some of the rise in food prices are due to the difficulties in Eastern Europe. Those difficulties have affected seed oils and wheat. However, these difficulties are not the only things to blame. Bad weather conditions in the United States, poor harvests in South America, and high use of ethanol inside the United States are reducing inventories and raising prices on staple food goods.

These corn and soybean prices are near record highs and are jumping up higher than inflation for food products. Both corn and soybean are likely to break records for pricing in the coming weeks. This increase is affecting the cost of making everything. Pork chops, Coca Cola, eggs, chicken meat, and even gasoline are set to rise due to the record prices for corn specifically. The last time the consumer price index was close to this level was back in 1981. US food prices rose to 8.8% from last year in March. This was caused by supply chain issues under President Biden, poor weather, and Eastern European difficulties.

BofA Securities analysts told the Journal that the Biden administration could boost food supplies by cutting red tape that forces oil companies to blend gasoline and diesel with ethanol made from crops. The administration just this month changed the rules to promote corn-made ethanol, an attempt to reduce high gas prices.

In the last 10 days many commodity prices have risen by 10% to 15%. Those commodities being sunflower, palm oil, steel, aluminum, copper, and crude oil. Additionally, to these commodities rising in the past 10 days, the cost of electronics is set to increase anywhere from 3% to 5% in the next month according to executives inside the industry. Many makers of goods from wheat, oats, and corn products expect the prices to rise by another 10% to 15% within the next 30 days. In India, there was panic buying of vegetable oil and fuel on the fears of a shortage and future price hikes.

The World Bank has said that the Eastern European difficulties have caused the largest commodity shock since the 1970s oil crisis. Commodity prices whether they be energy or food will remain at historic highs until 2024 according to the World Bank. The prices are expected to jump 40% in that time period. What is absent from the world bank’s assessment is the continued drought in the western United States, the low yields from South America, the heat wave which is impacting India’s crops, the supply chain issues which are preventing herbicides and fertilizers from reaching American farmers, the supply chain issues that are preventing tractor parts from entering the United states, the Union Pacific rail line refusing to carry grain at the rate it once did, and the use of ethanol in gasoline at 15% in the United states thanks to the Biden regime.

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It is disingenuous to blame all of the world’s food woes on the Eastern European difficulties. It is clear that we have supply chain disruption which is affecting the ability of farmers to plant. Additionally many food processing plants inside of the United States have been affected by fire, airplanes flying into them, and one had a boiler explode. All of these things will affect food prices and result in empty shelves.