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Up To Our Ears in Corn
Archer Daniels Midland and General Mills, take heart. Corn farmers are coming to your rescue.
According to a new report from the Department of Agriculture, farmers are expected to plant 93 million acres of ears in 2007, which is 19 percent more than last year's harvest. In fact, this year is shaping up to see the biggest corn production in the U.S. since 1944.
The additional acreage is expected to provide relief to ethanol producers, food manufacturers, and livestock producers that have endured rising corn prices for the past several years. The most active future contracts for corn jumped 59 percent in the past year, according to Bloomberg. But in the past two weeks, the price of corn has retreated nearly 17 percent, which is its biggest two-week decline since 1996.
Earlier this week, the cereal maker General Mills blamed high commodity prices for its flat earnings during the most recent quarter. Stocks for ethanol producers such as ADM, U.S. BioEnergy, and Pacific Ethanol all rose today.
But it seems the abundance of corn is coming at the expense of soybeans, which is used to make biodiesel fuels. The price of soybean futures soared today after the U.S.D.A. said that the acreage for soybeans is at its lowest level since 1995. Farmers are expected to plant 15 percent less than they did last year.
by Megan Barnett
Photograph by Paul Damien/Getty Images
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