CORN CRISIS TO HAVE MAJOR IMPACT 2007-2008

This was forwarded to me by one of my suppliers. Corn prices and supply will be major issues in food over the next two years. (All caps theirs not mine, but not unwarranted.)

• ETHANOL DEMAND TO PRESSURE CORN SUPPLY

• FUEL PRICES DRIVE COST INCREASES TO GROW CORN

• CORN INVENTORIES HAVE FALLEN SHARPLY

• COMMODITY TRADED CORN PRICE HAS DOUBLED

• FARMERS PLANTING MORE CORN PRESSURES OTHER VEGETABLE COMMODITIES AS SUPPLY IS REDUCED

• CORN FRUCTOSE- MAJOR INGREDIENT IN FOOD PROCESSING-RESULTING IN HIGHER COST OF GOODS

• CORN IS MAJOR FEED COMPONENT FOR ANIMAL PROTEIN PRODUCTION DRIVING UP COSTS OF BEEF, PORK, & POULTRY

• BOTTOM LINE IS OUR COSTS & OUR CUSTOMERS COSTS WILL BE HIGHER

To break it down, rising oil prices have driven the government to subsidize ethanol production as an alternative fuel source. This has caused speculation in the corn market as funds are dispersed to underwrite the costs of building new fermentation plants. This will pull corn out of the food chain, or at least make it more dear, which will drive the costs of producing meat. It will also drive the costs of a lot of food manufacturing as corn is the base material for a lot of goods, most noticeably as high-fructose corn syrup. Soybean prices will ride with corn as a replacement in feed and other uses.

This is a frightening picture as chicken and beef prices have been on the rise and produce prices are already high as a result of the food crisis. The best solution is to become a non-tofu eating vegetarian and go live in the hills where you'll grow your own food. Pick a spot near a stream for a grain mill and some hydroelectric power. Arm yourselves and build a windmill and learn how to compost.

But really, this will be huge. If our food infrastructure is to change for the better, the time is now.