In the last month corn futures hit an all time high of over $800/bushel due to a lackluster growing season. The Midwest droughts have caused some farmers to mow down the crop in order to salvage it for silage and livestock feed as opposed to picking what little good maize was grown. The day to day consumer may not understand why corn prices are important, but this crop has a major impact on your bank account.
While the exact percentage of foods that contain corn and corn byproducts is unknown, it is a guarantee that any time consumers purchase goods from the supermarket, a majority of those goods contain corn in some state. According to the Great Smokies Medical Center of Asheville, the following foods that we consume on a regular basis contain corn, cornstarch or corn syrup: baby foods, bakery items, beer, soda, cereals, condiments, gum, baking powder, flour mixes, gravies, sauces, canned fruits, soups, frostings and icings, tortillas, ice cream, candy, peanut butter, and margarine just to name a few. Even meat that we eat from the local deli has been fed grain which contains corn.
Outside of food items, corn is used in adhesives, stamps, talcum powder, paper cups, toothpaste, medicines and chalk.
It is safe to say that we are exposed to corn in some state every single day of our lives.
In the last 2 decades, ethanol research has begun to take maize off of the grocery shelves and put it into automobile fuel tanks. According to The Guardian, 25% of US grown corn goes in to ethanol research instead of the foods that we consume on a daily basis. This explains the dramatic increase in the price of corn, up to $800/bushel from $200/bushel in January 2006.
Consumers have been curious for quite some time now why their grocery bills have steadily increased in recent months and years; corn prices are the reason. Combine a crop which increased 300% in price in under a decade with fuel costs which have increased 50% in the same time (fuel that is used not only to harvest but transport the crop) and you have dramatically higher prices.
Many would argue that these high prices are the result of inflation; that is not the case. As we have previously mentioned, inflation may perhaps be a long term issue, but not a cause for concern yet. In fact, when adjusted for inflation, corn was the most expensive it has ever been back in 1983.
With the growing season coming to a close, there is little that farmers can do at this point to increase corn supply. Supermarket prices will likely remain high until next summer at which point farmers will hope for a more profitable season. It can be frustrating for consumers who are still recovering and cutting costs during a tough economy to see their grocery bills so high, but there are things that could be done. If the US were to put ethanol research on hold, prices would likely decline. Another option would be for researchers to find alternatives to corn syrup and cornstarch in the goods mentioned earlier. However, until we can increase corn supply by reducing ethanol, recording a phenomenal growing season or by researching alternatives to corn byproducts, expect to see your grocery bill on the rise until next summer.