Food Price Spike Dead Ahead: US Cuts Corn Crop Forecast By 12% As 56% Of America Is Under Drought Conditions

Tyler Durden's picture

Who knew the next black swan would be deep fried? The biggest piece of imminent food inflation news over the past months, coupled with what is shaping up to be another record hot summer (for the best tracking of real-time electricity consumption primarily for cooling news we recommend the following PJM RT tracker of power load), has been the collapse in the corn harvest due to the worst drought since 1988 as 56% of America is in drought conditions. Today, the US just added some burning oil to the popcorn by cutting the corn-crop forecast by 12% to 13 billion bushels on expectations of a 13.5 billion harvest. Then again, who needs corn, when you can have cake?

Bloomberg explains:

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Quinvarius's picture

Margin raise time.  Bankers cannot allow farmers to get ahead.  Must..strangle...economy...

Comay Mierda's picture

start growing your own food and wave "hi" to the drones that will start flying over your house

Abitdodgie's picture

The crops will be 25% down this year ,then next year 50%, then next year 75% ,then it will start getting back to normal on the 4th year, just heads up.

FEDbuster's picture

Not to mention many farmers were Corzined when their hedging accounts were raided by MFG and PFG.

Uber Vandal's picture

If one were to use 2007 as 1927 for the start of the housing crash, then 2009 to the 1929 crash, the crops being 50% down in 2013 and 75% down in 2014 would line up perfectly with the 1933-1934 dust bowl.

In 1932, 14 dust storms were recorded on the Plains. In 1933, there were 38 storms. By 1934, it was estimated that 100 million acres of farmland had lost all or most of the topsoil to the winds.

"Three little words achingly familiar on the Western farmer's tongue, rule life in the dust bowl of the continent – if it rains."

Kestrel_1's picture

The Farmers suffer the most in this game...the ADM, Cargill, Monsanto are the ones that prosper the most.  Look at the last 2 years, they have only made better profits than ever, DURING the greatest recession/depression ever.  And for ZH to parrot this story is only fueling the brainwashing that these companies do through the media...getting us all prepared for higher prices at the grocery stores while they again hit record profits...just more fleecing to come.

Broomer's picture

You are receiving an early warning that prices will rise because there is no fucking corn and you are complaining?

Less whining and more stockpiling.

adr's picture


Even with the reduced forecast, this years harvest will be the third highest in history. Last year was the largest harvest of corn ever. Silos are still full of corn from last year and there is more than enough grain to go around.

The price of corn has virtually nothing to do with actual harvesting conditions or amount of grain in the market. It is 100% manipulated by futures traders 99% of who don't ever take delivery of a single bushel.

The price spike of corn has pushed the price to double the level it should be, even with a record drought.

Wall Street profits, we lose. Simple as that.

dark pools of soros's picture

but why waste a fake crisis?



mudduck's picture

Indeed. Perfect excuse to add a couple of lizard genes and maybe a cactus gene or two to make corn more 'drought resistant and tastier'.

Manthong's picture

Here in the midwest metro, we burn corn inefficiently in our cars.. and pay extra taxes to do it.

FeralSerf's picture

You used to burn it in your corn stoves to heat your houses.  Maybe you still do?

Lednbrass's picture

Last year was NOT the largest production year for corn ever, two of the previous three years were higher.

Starting stocks for the Dec.-Feb. quarter of the 2011-12 year (I dont know why they break it down like they do instead of using calendar years) are considerably lower than previously also, actually the lowest since 2006-7.

Kestrel_1's picture

@adr, you have agreed with my point.  Cries of doom and complaining of higher costs when there is plenty of product on the market.  Yet, these big companies only cut the farmers pay and raise the prices to everyone so they "win, win".  My original comment is about the structure of the food industry, the huge agro-companies gutting the heart and soul of America, ruining the corps and land for future generations and then using every opportunity they can find to put the blinders over peoples eyes so they name their price.  SO @Lednbrass, that is what I mean about brainwashing.  SO @jayman21, This drop in rainfall is their new opportunity to regame the system.  And @Broomer stock up on your HFCS.



Lednbrass's picture

Private farmers get what the market will pay, not what ADM or some other conglomerate wants or doesnt want. Something like food that very few are willing to actually produce should command a good price- it is far harder to accomplish than most realize. There are also substantial variants in region- look at corn pricing in the link I posted and you will see that it is considerably cheaper in at least one region.

adr was also incorrect about both production and existing supplies, his statement simply is not reality.


Kestrel_1's picture

Stop with the bullshit ethonal production and use food to feed people.

Tijuana Donkey Show's picture

That means growing something other than corn. Corn mostly poisons people, as it's delivered as HFCS, which is why there is a direct parallel between it's increased use, and Americans becoming fat fucks. Sky high HFCS is a good thing, maybe eat something green, and less meat. 

FeralSerf's picture

There's an even better parallel between the introduction of dwarf wheat and Americans becoming fat.

Most corn that is grown is used as animal feed.

Lednbrass's picture


Fueling what brainwashing, you idiot? The story is explaining a simple basic fact- without enough rain, plants dont grow. Most corn in my area is very small and stunted (3-4' which is pitiful and sad for this time of year), anyone growing a large amount that doesnt have expensive irrigation and costly water bills isnt going to have much of a harvest this year. Mine is tall and healthy, but I only run a small patch for personal use and I irrigate.

I doubt you have ever produced so much as a single tomato so seriously- shut up.  While I dont care for Monsanto or corporate farms they arent stopping the rain from falling. Only a small percentage of farmers are affiliated with any of those outfits.

You are an urban dumbass whose complete lack of knowledge unfortunately does not preclude your having an opinion and trying to work it into whatever storyline is in your head. Big crop farmers without irrigation (the majority) are going to have small yields this year, period- and wait till you see beef prices this fall and next year lol.

It is quite simple really. No rain = higher losses in crops and animals= more expensive for what is available. Low supply, high demand.

jayman21's picture

"And for ZH to parrot this story is only fueling the brainwashing that these companies do through the media"


I will add that weather patterns are not constant.  History has periods of less rain fall than others.  They go in cycles.  To ignore history and not prepare is just stupid.  Good luck figuring out if the corn really exists or not.  For the history impaired....1930s dust bowl is a good starting place.  Also a depressed economy in the 1930s just in case you did not know that either.


ZH and brainwashing...never thought I would see those two words together.


As for the big 6 food producers....I fart in their general direction as much as possible.

Tijuana Donkey Show's picture

Your forgetting that that the central region has drained almost all of it's aquafiers, so irrigation isn't available at this point. Texas can go fuck themselves, as the "free" market will help them sort it out. 10 years from now, Americans will be trying to sneak into Mexico for food and jobs.

MassDecep's picture

Almost at Soylent Green times. You can bet the gov will be ready with handouts, spiked with more compliant drugs to stimulate conformity. "Get Your Marks" come and "Get Your Marks"

LULZBank's picture

Very very... Long Popcorn.

sabra1's picture

so what your saying, is that corn just got creamed?

akak's picture

That would have been even funnier if you had a solid grasp of 3rd-grade-level grammar, and understood the basic difference between "your" and "you're".

sampo's picture

Ethanol, Bitchez!

Jason T's picture

"We don't have the food supplies to maintain the population of the United States itself, right now!" Lyndon LaRouche said this July 7. We are now well into the principal crop season of North America, and it's a catastrophe. Drought persists in the entire southwestern part of the continent, but also dryness and heat have struck a multi-state zone in the U.S. Cornbelt. The weather impact, the decades of anti-improvements, plus the barring of any food reserves under WTO rules, means hunger and famine. A few updates from Mexico and the U.S. document the scale of this emergency.
Bob's picture

"FARMERS FACE FINANCIAL SHOCK from having forward contracted to supply corn they now won't have, and can't obtain. Farmers have been conditioned to be savvy, and to advance buy and sell grain, and advance-contract for inputs — called "risk management." But their own crops are withering in the fields, and they cannot line up other sources to fulfull contracts they made, even at any (big loss) price.

* ETHANOL PLANTS IN SOUTHEAST IOWA are facing financial failure. They have cut back or suspended production, because of the too-high price of corn, or absolute lack of corn. They have been trying to sell their stock; no one is buying. A mass crash of ethanol companies regionally (farmer-owned) is imminent."

duo's picture

let them all die (the ethanol plants, that is)

pods's picture

Here here!  I am getting damn tired of replacing burned out catalytic converters.


Mad Max's picture

Yeah, another hidden cost of this stupid fucking subsidy that makes no sense.  I had to replace a catalytic converter on my car last year - fortunately it was still under the emissions warranty by a thousand miles or so.  First time I've ever had to replace one or heard of it.  This is on an E85 compatible (ha, ha) car, which I had used E85 in maybe 10-15 times several years ago before the prices made it a consistently bad decision on a miles per dollar basis.  Apparently that was enough to set failure in motion.  Brilliant.

laomei's picture

The ethanol is a slight of hand because you can't afford real gas anymore.  

Here's the math:

Say a gallon of gas is $3.80, which now contains 15% ethanol.

Ethanol is cheap at $1.63 a gallon

So that last 15% of the gallon is only costing $0.2445

Remove that from the $3.80 and we're left with $3.556 for 85% of a gallon of gas.

Divide by the 0.85 to get the price of a full gallon of gas, which is $4.183.

It's just another trick they pull.  The subsidy is created by forcing refineries (by law) to use ethanol, which creates a false demand while at the same time helping to create the illusion that you can still afford gas.

KK Tipton's picture

Yes!  Finally somebody says it.


Notice the price of diesel. Near $4.00 or above.
This is because diesel is a *real* energy dense fuel...not cut with corn squeezins'

You get what you pay for.

Why do you think they want Americans to drive gasoline cars?
Because they burn up much greater volumes of crap fuel to go a given distance.


Never One Roach's picture

Cattle business is dying too due to the drought. Farmers are selling their cattle at rock bottom prices as well as their farms. Problem with the farms is there is an oversupply of raw land so very few buyers.

Miffed Microbiologist's picture

So true! I was talking to my mother in law the other day who was a Red Angus breeder a few years back. She was shocked how much serious culling is being done due to drought. This seriously affects your future because it takes years to get enough breedable heifers to increase the herd. She only keeps 10 head now for friends/ family and the prices for yearlings have doubled from last year if you can even find them. Luckily she only raises grass and barley fed beef so the corn prices won't get her. I guess there's a shit storm coming in beef soon.


MassDecep's picture

And I called for a drought upon the land, and upon the mountains, and upon the corn, and upon the new wine, and upon the oil, and upon [that] which the ground bringeth forth, and upon men, and upon cattle, and upon all the labour of the hands. Hey Fellow Americans, lets continue murdering babies and supporting Homosexuality. Seems to working real well.

Yes I do believe in God's Judgement upon a wicked land

writingsonthewall's picture

Hey Fellow Americans, lets continue murdering babies and supporting Homosexuality. Seems to working real well.


a) An embryo is not 'a baby' - clearly biology is not your strong subject

b) The bible says nothing against homosexuality - you just interpret it that way so you can get your closet homosexual fears out of your system.


Like most things 'religious' - a good story totally devoid of fact or reason.

blunderdog's picture

The Bible says nothing about abortion, either, and it all used to be just fine with the Catholic church until "the quickening" because it was believed that it took awhile for the soul to infuse the body.

Religious zealots are worthless.

tekhneek's picture

I'm not a religious person, nor do I support/not support gay shit. If you want to be gay, be gay.


Leviticus 20:13 says:
"If a man practices homosexuality, having sex with another man as with a woman, both men have committed a detestable act. They must both be put to death, for they are guilty of a capital offense."

There's also a passage in ... kings I believe that says it's an abomination in god's eyes meaning, you go to hell and stuff like that.

Tijuana Donkey Show's picture

The bible clearly says you should eat Kosher, has a wide range of talk about NC-17 sex descriptions, and a bunch of other rules that people need to follow. The bible has the same problem as America - selective enforcement. That's why I only eat pork from homosexual pigs that support abortion, it's the quickest path to rightousness. 

AnAnonymous's picture

For once, that is very cynical. Pre-US citizen distortion of meaning.

TheFourthStooge-ing's picture


Pre-US citizen distortion of meaning.

So you will now apply AnAnonymousism translatorification and, in accordance with your life philosophy, provide your Post-US citizenism distortion of meaning?

akak's picture

You are clearwise on the birth of gripping the understandingness of deepest meanings of self-denialistic algebraic coconut Chinese Citizenism hobnobbery.

TheFourthStooge-ing's picture

Chinese citizenism sorcery such as this becomes evident once you recognize the AnAnonymousitizenistic pattern of extorting the farm and pouring the week. This makes possible revealery of their algebraic hobnobbified coconuttery with obviosity plainness muchly.

object_orient's picture

Too many abortions and homosexuals cause drought? Hmm. Too few would probably cause floods then. What is the optimum number of each so your wacky god will create perfect weather?