FOOD STOCKS SUFFER FOR ETHANOL
Global corn stocks have fallen to extremely low levels with American inventories falling to just 40 days’ consumption, according to the US Department of Agriculture. The average is reportedly 88 days, which is especially daunting since the U.S. provides 70% of the world’s corn.
As a result, corn prices have doubled since last year and are expected to continue to rise. Many people criticize the current administration’s plan to turn 1/5 of its corn harvest into ethanol-based fuel as global food stocks incur greater strains.
Farmers all over are racing to plant more corn, but often at the expense of other crops. Many Mexican farmers are abandoning the low-profit agave (and source of tequila) to plant corn, which could one day take a negative toll on the tequila category.
A high level exec at a major spirits company tells WSD that “while we’re not seeing too much of a difference at the moment...we’re definitely anticipating a price impact in the future.”
As a result, corn prices have doubled since last year and are expected to continue to rise. Many people criticize the current administration’s plan to turn 1/5 of its corn harvest into ethanol-based fuel as global food stocks incur greater strains.
Farmers all over are racing to plant more corn, but often at the expense of other crops. Many Mexican farmers are abandoning the low-profit agave (and source of tequila) to plant corn, which could one day take a negative toll on the tequila category.
A high level exec at a major spirits company tells WSD that “while we’re not seeing too much of a difference at the moment...we’re definitely anticipating a price impact in the future.”
posted at 11:52 AM
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