If we look hard enough, we would find corn everywhere. It’s in our animals’ food, our fuel, our cereal, and our beverages.
So, when the price of corn goes up, everything else could get more expensive.
Rising Food Prices
Among the five primary kinds of corn, the yellow dent corn that is fed to animals composes almost 40 percent of U.S. corn usage. Meanwhile, Congress has mandated that our gasoline contain biofuel. And yes, that means most of our gasoline has ethanol that is made from the starch in corn grain. So, when we add together the corn in animal feed and in ethanol, we wind up with 73 percent of all the corn used in the U.S.
Not surprisingly then, it mattered when the price of corn doubled between May 2020 and May 2021. On the supply side, Brazil had a drought that diminished its crop. At the same time, demand is up from China as they regrow their hog herds after a long bout of swine flu:
Our Bottom Line: Rising Food Prices
In a recent blog, the IMF took us beyond corn to four reasons that our food prices are going up. They start with letting us know food prices were going up before the pandemic. But after that, we had to lock down and pivot our food supply chain toward consumers and away from commercial establishments. The switch elevated shipping and transport costs. Also on the supply side, the pandemic and weather pushed producer prices upward.
Throwing corn into the equation, it all adds up to higher food prices:
Now though, corn will no longer surprise us.
My sources and more: The idea for today’s blog came from the IMF. Next, looking for an example, I went to corn.and rediscovered the Visual Capitalist. Then, if you want to see the difference between price hikes for food at home and away from home, the USDA has some insight. And finally, Business Insider added to the entire litany of price hikes with more individual items.