Rising Corn Acreage Failing to Meet U.S. Feed, Ethanol Use (1) – Bloomberg.com

Food Mar 29, 2011 No Comments

U.S. corn planting will expand to cover the second-largest area since World War II this year and still fail to meet demand for feed and ethanol, driving prices to their highest in at least 34 years.

Corn will rise 5.7 percent to average $7.15 a bushel in the third quarter, the most since at least 1977, Abah Ofon and Koun-Ken Lee, analysts at Standard Chartered Bank in Singapore, wrote in a report.

Sowing will expand by 4 percent to about 91.75 million acres, the most since 2007 and the second-highest since 1944, according to a Bloomberg survey of 32 analysts. Corn will rise 5.7 percent to average $7.15 a bushel in the third quarter, the most since at least 1977, Abah Ofon and Koun-Ken Lee, analysts at Standard Chartered Bank in Singapore, wrote in a report.

A United Nations index that tracks the cost of 55 foods rose to a record in February, with higher prices contributing to riots in the Middle East and northern Africa that toppled leaders in Egypt and Tunisia. That’s driving up inflation and spurring central banks to consider higher interest rates that may slow global growth.

“We will have inadequate acreage, which without spectacularly favorable weather, will usher in a significant food shortage” in some parts of the world, said Doug Jackson, a West Des Moines, Iowa-based vice president at INTL FCStone Inc. “Demand is outrunning normal production expansion, led by biofuel policy,” said Jackson, who has been a grain analyst since 1974.

via Rising Corn Acreage Failing to Meet U.S. Feed, Ethanol Use (1) – Bloomberg.com.

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Rod Sherkin

Rod is a former senior executive, responsible for Purchasing, for both Pillsbury and Ball Packaging back in the 80’s and 90’s. Since then, he has continued to work in the Purchasing field as both a consultant and founder of the website Propurchaser.com.