Agri-news you ought to peruse
"An ethanol-fueled spike in grain prices will likely hold, yielding the first sustained increase for corn, wheat and soybean prices in more than three decades, according to new research by two University of Illinois farm economists.
"Corn, an ethanol ingredient that has driven the recent price surge, could average $4.60 a bushel in Illinois, nearly double the average [price of] $2.42 a bushel from 1973 to 2006, said Darrel Good and Scott Irwin, professors of agriculture and consumer economics, [in] a report titled 'The New Era of Corn, Soybean and Wheat Prices.'
"Research revealed just two earlier lasting increases in grain prices. The first came after World War II, when price controls were lifted and post-war rebuilding began. The second lasting increase began in 1973, sparked by shifts in exchange-rate policies, massive grain purchases by the former Soviet Union, and a period of escalating energy prices and rapid inflation.
"Good says the dawn of the new era mirrors the earlier ones, driven by the growth of ethanol and accompanied by higher inflation and production costs that have been permanently inflated.
"Irwin says the new price era could easily last two or three decades, sustained by corn prices that are now tethered to near-record gasoline prices because of ethanol. [This article was published in Sept. 2008 --Ed.]
Good says new era prices would not be affected by a shift from ethanol to another fuel additive made from crops, such as switchgrass. Finite land available for production would continue to drive up prices for other grains, just as corn has raised prices for soybeans and wheat.
"'We would have to steal land away from corn to grow a different energy-related crop, so now you have that competition again,' Good said.
"Irwin says food costs have likely seen the worst of the shift to higher-priced grain after posting 5 to 6 percent increases this year. But he warned that commodities account for just 20 percent of food costs, so prices could still rise to cover labor, transportation or other expenses."
"Corn, an ethanol ingredient that has driven the recent price surge, could average $4.60 a bushel in Illinois, nearly double the average [price of] $2.42 a bushel from 1973 to 2006, said Darrel Good and Scott Irwin, professors of agriculture and consumer economics, [in] a report titled 'The New Era of Corn, Soybean and Wheat Prices.'
"Research revealed just two earlier lasting increases in grain prices. The first came after World War II, when price controls were lifted and post-war rebuilding began. The second lasting increase began in 1973, sparked by shifts in exchange-rate policies, massive grain purchases by the former Soviet Union, and a period of escalating energy prices and rapid inflation.
"Good says the dawn of the new era mirrors the earlier ones, driven by the growth of ethanol and accompanied by higher inflation and production costs that have been permanently inflated.
"Irwin says the new price era could easily last two or three decades, sustained by corn prices that are now tethered to near-record gasoline prices because of ethanol. [This article was published in Sept. 2008 --Ed.]
Good says new era prices would not be affected by a shift from ethanol to another fuel additive made from crops, such as switchgrass. Finite land available for production would continue to drive up prices for other grains, just as corn has raised prices for soybeans and wheat.
"'We would have to steal land away from corn to grow a different energy-related crop, so now you have that competition again,' Good said.
"Irwin says food costs have likely seen the worst of the shift to higher-priced grain after posting 5 to 6 percent increases this year. But he warned that commodities account for just 20 percent of food costs, so prices could still rise to cover labor, transportation or other expenses."
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