| Are rising corn prices to blame?
Posted: 7/5/2008 4:38:12 PM | I'm sure we have all heard about the rising price of corn is too blame for higher food prices but I came across a news bit stating how much of a box of corn flakes is actually the cost of corn.
It stated that corn today sells for about $5.50 a bushel. An 18-ounce box of corn flakes contains 12.9 ounces of milled field corn, so the actual value of the corn in that 18-ounce box of cereal is 7.9 cents. The cereal, however, sells for about $3.30 at the grocery store, so the farmer's retail share is a mere 2 percent. In other words, if the price of corn rises $1 per bushel and all other factors remain the same, the commodity impact on the box of cereal would be less than 1.5 cents. So it seems to me there are a lot of other factors in play in the rising cost of food and in my opinion the main one being the sky rocketing energy prices. | |
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| Are rising corn prices to blame?
Posted: 7/5/2008 8:53:56 PM | There certainly is no great mystery that the producer of the corn{the farmer} only ends up with 2% of the retail deal.We would drive ourself nuts counting all the other middle men{and middle women} in this scenario.As far as the raising cost of energy ,you have latched onto the culprit at work.I see this effect every place I go,from the grocery store,hardware,asphalt hot plant,concrete batch plant,lumber,roofing materials,.......................you name it,the list goes on and on.It takes energy to move all commodities to market.Most products are brought to market by diesel fuel.There was a time in not too distant history when a gallon of diesel was substantially cheaper than a gallon of gasoline.Those days are over..............the demand for diesel is now higher than ever.More things are propelled by diesel than ever before.Right now as we speak,a gallon of diesel on average across the nation is costing 4.64...................you read that right..............4.64..........................
10% of that goes to taxes,5% goes to distribution and marketing,21% to refining and lastly,64% to crude oil.Think about this............if a trucker is getting 6 MPG {which is really good},that literally means he or she is spending .7733 cents per mile just for fuel.
Over the highway trucks can typically carry 200 to 300 gallons of fuel for a range of about 960 to 1440 miles .Trucks can usually "draw" somewhere around 80% of that fuel capacity.........Thats just one operating expense.................throw in all the other items and now we get a better picture of why we are getting hit so hard every place we purchase our wigget`s................. | |
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| Are rising corn prices to blame?
Posted: 7/5/2008 9:21:48 PM | | I think it boils down to the basic cost of fuel. More corn is being used to produce ethanol these days to offset rising oil prices. In both cases sh*t rolls downhill so to speak. Each layer of middleman adds another layer to rising cost of doing business, as was presented by packleader in msg 2. The costs compound until it finally hits the pantry shelf. | |
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| Are rising corn prices to blame?
Posted: 7/5/2008 9:36:46 PM | Fertilizer prices ... Diesel ...
farmers are paying over $500 a day for one tractors fuel...
you don't think Exxon's profit effects prices do ya?
The greatest value of the product is the BOX...
we should be eating the Box with some corn syrup on it...
25% of the worlds corn is grown in Iowa... | |
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| Are rising corn prices to blame?
Posted: 7/6/2008 7:06:29 AM | American farmers are heavily subsidized. With the skyhigh fuel prices they may be hard pressed now but they have been subsidized all along.
I have seen references to mexico having a surplus problem with their corn production mainly do to american dumping practices under free trade.
I strongly suspect that a massive shell game is being played on all of us. | |
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| Are rising corn prices to blame?
Posted: 7/6/2008 8:57:44 AM | Romeo - You may be missing the point. Farmers are selling corn to the highest bidder. The ignorant subsidies that CONGRESS has extended to Oil Companies to produce Ethanol and Bio Diesel has driven prices up and created shortages for food suppliers. Some of the shortages result in reduced production and then higher prices to compensate. This includes "high fructose corn syrup" that sweetens many foods.
Then of course the price of oil to transport food compounds the price increases.
The best thing that will come of the rising gas prices will be the death of many of the biased newspapers in the USA. The cost of producing most printed matter is 60% transportation. Trees to the paper mills - Paper to printing plant - printed matter to consumer.
Many foods have the same transportation costs involved in production.
I blame the whole mess on Al Goreacle and his disciples. | |
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| Are rising corn prices to blame?
Posted: 7/6/2008 11:20:33 AM | The interesting thing in the whole matter of corn price irising is just how much of our food is "contaminated" with corn. (I have a corn allergy, hence the "contaminated" label...) In NA, probably 80% of pre-made beverages have glucose-fructose (or HFCS as commonly labeled in the states), or some other form of corn syrup. We rarely use sugar in commercial food production because corn sugars are cheaper, and usually sweeter (costs less, need less = higher profit margin).
As someone who can't eat wheat or corn or their derivates, I've realised just how much of the food marketed to us often has one or both of those ingredients in it. About the only thing safe, is fresh veggies, or specialty foods. Perhaps the price of corn wouldn't be so high if we didn't feel the need to put it in EVERYTHING... | |
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| Are rising corn prices to blame?
Posted: 7/6/2008 3:49:30 PM |
The interesting thing in the whole matter of corn price irising is just how much of our food is "contaminated" with corn. (I have a corn allergy, hence the "contaminated" label...) In NA, probably 80% of pre-made beverages have glucose-fructose (or HFCS as commonly labeled in the states), or some other form of corn syrup. We rarely use sugar in commercial food production because corn sugars are cheaper, and usually sweeter (costs less, need less = higher profit margin).
Check out the Movie "King Corn" ..... Thank Earl Butz for all the corn.
There is no shortage of corn.... 25% of the worlds corn is grown in Iowa...
USDA’s October crop report nudged 2007 corn production higher to 13.318 billion bushels - up from 13.308 billion last month and 26 percent higher than last year.
The change results from a new estimate of 93.6 million acres planted (more than 92.888 million estimated at the end of June). USDA also reduced its average yield estimate to 154.7 bushels from the 155.8 in September. That’s still the second best on record. The market was looking for a production estimate ranging from 13.232 to 13.600 billion bushels, according to the University of Illinois.
This year’s national corn production will be the largest on record.
http://www.agriview.com/articles/2007/10/18/crop_news/crops01.txt | |
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| Are rising corn prices to blame?
Posted: 7/6/2008 4:40:02 PM | Corn prices alone aren't to blame. I haul corn for a living. Last year, fuel was $3.30/gallon in the Central states. Now it's about $4.89/ gallon. The cost of hauling has gone up due to fuel, insurances, DOT regulations, and equipment maintenance. When we were able to haul corn for $ .30 /bushel last year, we are needing $ .50 / bushel just to haul it from the field to the elevator. Once it goes to the elevator, then it is stored and hauled to the mill, where it's processed. Once processed and turned into the cornflakes, then it's packaged and the pallets of boxes are shipped to the warehouses where they are stored, then the boxes of cornflakes are shipped to the stores as needed.
As a trucker, insurance is at an all time high, fuel costs are outrageous, and the DOT has cracked down on regulations, all of these factors have made it even more costly to operate, which also makes rates higher, in turn making the finished product cost more. Corn is used for more than just cornflakes. With Ethanol plants taking up a huge amount of the corn, and animal feeding as well, your cornflakes take a back seat to other industry.
Last year, farmers paid less for fertilizer, pesticides, tractor diesel, property taxes, and crop insurance, keeping the prices low. Then add equipment repairs, weird weather and crop loss to that as well. Kansas virtually had NO usable wheat last year, driving wheat prices to an all time high. Property taxes are high, as well as all the other things a family needs to survive. We have signs in Kansas that say "ONE Kansas farmer feeds 128+ people and YOU!" They are actually feeding more than 128 people these days...
Sure, there are people out there who's pockets are more padded due to where they sit on the totem pole; Such as grain brokers, and fuel stockholders, but the average farmer and trucker, we are seeing a horrible decline. Lucky for me, I do both...
The only thing we really haven't seen a huge rise in, would be paychecks. And everyone who has a job sees this. The middle class working American is hit the hardest. We've lost a lot of our hobbies and things that relax us, like taking a long country drive just to look at the scenery, recreational travel and tons of other things that we've forgotten we ever did...
So next time you buy that overpriced box of cornflakes at the grocery store, just think of how many lives have sacrificed so you can have a healthy breakfast... Oh, and by the way... One bushel of corn weights 56# on average... And if an 18 oz box of cornflakes only contains 12.9 oz of milled corn, what are the other 5.1 oz??? Or do I even want to know...
CowTrucker
Chapman, Kansas | |
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| Are rising corn prices to blame?
Posted: 7/7/2008 4:58:28 PM | You never figure out what a farmer makes by percentage points on any product...it doens't work like that in a lot of cases. Example...if you try to say a milk producer makes 3-4 % of the total retail cost...wrong. They don't. They make the SAME money they always did...because the gov't SET that price. They do not take into consideration the higher costs for running a farm. they do not take into consideration the fast rising fuel prices. If a farmer makes 1.68 per gallon of milk, and the price increases at the store, the farmer still makes 1.68 per liter.
If I remember right, corn is a subsidized crop in mnay states...and therefore a set gov't price is what it is sold for. Price fluctuations mean nothing to the farmer...he only gets what he is told he will get...forget the rising costs.
Same with grain here in Canada. A farmer cannot take his crop and sell it elsewhere for a higher price. It is illegal. (or was last time I heard...some guy running a load to the States got nailed and was forced to sell to the local wheat board at a lower price that the market he had been heading for!)
Any grain crops...no matter what...has a certain amount of "protein" in it. That protein is from insect parts mostly. You don't notice it at all when you pour your wheaties or whatever. So...if your brand has a sudden increase in protein...you know where it came from.
Totally impossible to "wash" or "sort out" all the bugs and parts...so it is mashed right in there...it doens't hurt you...does more good than anything. | |
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| Are rising corn prices to blame?
Posted: 7/7/2008 5:17:21 PM | Americans are now paying more than $1 billion more for gasoline per day than they did five years ago, according to an OPIS report Monday. In June, the world's largest oil consumer spent about $47.38 billion on the motor fuel — nearly three times as much as in 2003.
Fred Rozell, retail pricing director at OPIS, said retail gas costs will likely continue to rise. He joined a number of analysts in predicting oil prices still have further to climb, and said that could push prices at the pump up by as much as 25 to 30 cents per gallon more before the end of summer.
"It doesn't look like there's anything that's going to drive (oil) prices down at this point, even reduced demand," Rozell said. "There's so much momentum with money going into commodities right now, it's going to continue to go up."
Fears that a fresh conflict in the Middle East could cut oil supplies eased over the weekend.
Javier Solana, the European Union foreign policy chief, said he received a letter from Iran on Friday responding to an offer of incentives meant to persuade Iran to halt enrichment. He also said he had a lengthy conversation with Iran's top nuclear negotiator, Saeed Jalili, that was "constructive in principle."
Iranian state media reported that Solana had agreed to talks in the second half of July, but the EU official could not confirm the accuracy of those reports. He did not rule out the possibility of a meeting, however.
Meanwhile, Tropical Storm Bertha was upgraded to become the first Atlantic hurricane this year. Fears that the storm might threaten oil and natural gas installations in the Gulf of Mexico subsided as the storm was expected to head far to the north.
Oil hit a trading record of $145.85 on Thursday in New York before settling at a record close of $145.29 a barrel.
A falling dollar has helped boost oil prices around 50 percent this year as investors often buy commodities such as oil as a hedge against inflation when the greenback weakens. Also, a struggling dollar makes oil less expensive to investors overseas.
The dollar fell marginally against the euro Monday.
In other Nymex trade, heating oil futures fell by 13.64 cents to settle at $3.9696 a gallon while gasoline futures sank 8.83 cents to settle at $3.4827 a gallon. Natural gas futures fell 60 cents to settle at $12.977 per 1,000 cubic feet.
In London, August Brent crude fell $2.55 to settle at $141.87 a barrel on the ICE Futures exchange. | |
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| Are rising corn prices to blame?
Posted: 7/8/2008 6:41:18 AM | No, the speculators had to move their money out of the housing market. They found oil and here we are at the mercy of people who make money by moving money around from investment to investment.
The commodities markets are controlled by huge multi national investors. A conglomerate based in Austria couldn't care less about the Canadian middle class when it comes to making money. | |
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