An unrelenting drought blistering the Midwest has sent the nation’s corn prices soaring.
The continuation of blazing temperatures coupled with few rain showers could be the worst natural conditions to have hit the corn belt since 1988. Farmers now are expected to only harvest around 13 billion bushels of corn, which is about 12% lower than June’s prediction of 14.8, according to a report released Wednesday by the U.S. Department of Agriculture.
As any economics 101 professor could testify, the lower volume of supply means a price hike. Last month, corn was sold for prices between $4.20 and $5 a bushel. The USDA now is predicting that the 2012/2013 season average corn price will be somewhere between $5.40 and $6.40 per bushel. Corn futures for December climbed close to $7.50 per bushel during yesterday’s trading, but closed at $7.04 according to CME Group data.
In the U.S., corn isn’t just a salty, buttery cob of yummy-goodness consumed at summer festivals. Corn — and, more accurately, corn-based products — is a staple of the American diet. It’s also found in many inedible items too. According to the Corn Refiners Association, corn refiners use more than 1.4 billion bushels of U.S.-grown corn to produce a broad array of food, industrial and feed products.
Higher prices for the grain will most likely result in higher prices for the following consumer products.
Here’s a look at 70 items that consumers might have to pay more for because of surging corn prices:
Corn is the main ingredient in livestock feed, which means that when the cost of corn rises, the cost of beef, pork, poultry and even some types of fish could increase as well. The USDA already is predicting price hikes for eggs, butter, cheese and hogs. However, corn prices have not been directly named as the reason for the increases. While McDonald‘s (NYSE:MCD) probably won’t nix its Dollar Menu, and supermarket chains like Safeway (NYSE:SWY) will always accept coupons, consumers could see the price of prices rise on these popular items:
|• Beef||• Pork||• Poultry||• Farm-raised fish|
|• Cheese||• Milk||• Ice cream||• Yogurt|
|• Eggs||• Cream cheese||• Sour cream|
Soft drinks like those made by Coca-Cola (NYSE:KO) and PepsiCo (NYSE:PEP), as well as other sugary beverages, are sweetened with high-fructose corn syrup (HFCS) because it’s cheap to produce. However, rising corn prices could up prices of these and other items if they contain HFCS:
|• Soda||• Fruit juices||• Fruit punch||• Lemonade|
|• Iced tea||• Smoothies||• Milkshakes|
Corn — and sometimes a combination of corn and wheat — often is used to make many varieties of alcohol. That means you could see higher prices when you go to purchase your favorite mixed drink — especially if the liquor it was made made in America:
|• Tequila||• Whiskey||• Schnapps||• Vodka|
Obviously, corn is an ingredient in cereals like Kellogg‘s (NYSE:K) Corn Flakes, but corn meal and corn starches also are used in a variety of wheat-based cereals of both the hot and cold varieties. Prrepackaged breakfasts meals — think the Bob Evans (NASDAQ:BOBE) bacon, egg and cheese croissant — also contain corn products aside from the obvious meat and dairy items. Most cereals and breakfast treats also are sweetened with HFCS, as well as other foods that are rich in fiber. And speaking of fiber, many brands of bread contain HFCS:
|• Instant oatmeal (flavored)||• Various hot cereals||• Cold cereals||• Toaster pastries|
|• Breakfast bars||• Instant breakfast mixes||• Microwavable meals||• Toast|
In addition to being used as sweeteners, corn byproducts are used as thickening agents and preservatives in various items used in cooking and baking:
|• Margarine||• Corn oil||• Nonstick cooking spray||• Cake/brownie mixes|
|• Sauces/gravies||• Condiments||• Vinegar||• Jams/jellies|
Popcorn is a no-brainer, but numerous brands of munchies also are flavored with corn syrup and other corn-based products. Additionally, many snack foods are baked or prepared in corn oil:
|• Candy||• Mints/gum||• Crackers||• Chips|
|• Pretzels||• Cookies||• Granola bars||• Canned fruit|
Personal Care Items
The rich lather of bubbles that foam in dish and laundry detergents — like many made by Procter & Gamble (NYSE:PG) — often are the result of corn-based products. Starch from corn often is used as a laundry aid, and corn-based products also are present in myriad personal hygiene products:
|• Toothpaste||• Shaving cream||• Laundry detergent||• Soap|
|• Dish/dishwasher detergent||• Cosmetics||• Sunscreen||• Shampoo/
Corn-based ingredients like glucose often are found in various prescription and over-the-counter health care products:
|• Vitamins||• Cough drops||• Antibiotics||• Contact lenses solutions|
|• Intravenous solutions|
Humans aren’t the only creatures dependent on corn. Corn-based ingredients can be found in food and pet care items. Corn also is an ingredient in some types of plastics:
|• Pet food||• Treats||• Grooming products||• Chew toys|
And Still More
For all the reasons exhausted in this article, corn-based ingredients contribute to the making and maintaining of the products below … and many more.
|• Ethanol||• Crayons||• Paint||• Blue jeans|
|• Food containers||• Glues||• Paper products|