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Corn shortfall may affect food prices

11 Apr

Apr. 8, 2011 06:42 AM
Associated Press

ST. LOUIS – Rising demand for corn from ethanol producers is pushing U.S. reserves to the lowest point in 15 years, a trend that could lead to higher grain and food prices this year.

The Agriculture Department reports that corn reserves will fall to a projected 675 million bushels in late August, when the harvest begins. That’s roughly 5 percent of all corn consumed in the United States – the lowest surplus level since 1996.

The limited supply is chiefly because demand from ethanol makers rose 1 percent to 5 billion bushels, or about 40 percent of the total crop.

Corn prices affect most products in supermarkets. Corn is used to feed the cattle, hogs and chickens that fill the meat case, and it is the main ingredient in cereals and soft drinks.

One bushel of corn equals 25.4 kilograms, or 56 pounds.

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