Friday, April 05, 2013

1157 The Corn Crisis


1157 The Corn Crisis

Do you remember when corn prices were high as an elephant’s eye?  Do you remember the Big Corn Scare?  They were going to divert almost all of it into making ethanol.  The world’s horses would starve.  The Jolly Green Giant would shrink to 5’8”, go on unemployment, then food stamps, then welfare and end his life living in a refrigerator box beneath the water tower in Le Sueur, Minnesota.  

But the farmers would get rich.  And your car would start faster in subzero winters.

Well, the farmers didn’t get rich.  They overproduced.  Ethanol as fuel was and is a bust.  Even with last summer’s drought, prices were shaky.  Now... they’re down right deflated.

There’s so much corn in storage they’re practically giving it away.

And that leads to another big question:  what’ll this do to the price of corn muffins, corn flakes, corn syrup, ink, wallpaper, antibiotics, paper plates, firecrackers and a long list of other stuff that is either part corn or uses corn in the manufacturing process.

Dumb companies will do nothing.

Smart companies will knock down prices.

Really smart companies will knock down prices a teeny bit, advertise their generosity and pocket the difference.

Meantime, the farmers will be asking the Green Giant where they can get their own refrigerator boxes.  Farmers net pennies on the bushel for this and everything else they grow.  Supermarkets make pennies on the bushel.  So where does the money go?

Middlemen and shippers. Nothing new about that.  Same deal is standard operating procedure in the meat and garment industries.

Right now, the corn biz is as corny as Kansas in August.  The high-eyed elephants in the field are sick to death of corn.  Your Flex Fuel Chevy truck just lost 20% of its resale value, which wasn’t much to begin with.

So... first the corn scare, now the corn crisis.  So much corn, it’s coming out of our ears.

(Did I really say that?  Sorry.)

Shrapnel:

--Nice to see the Leno/Fallon handoff will be handled well after all.  One small step for the timeslot, one giant step for Comcast, the often ham-handed cable company now with slightly fewer delusions about who runs things at NBC.  You create a monster, you gotta feed it.

--If you think the articles in the New Yorker Magazine are long, you’re right, but not as long as their reader surveys.  The latest goes on and on and on and on.  They’re trying to find the level at which people will keep paying for online content.

--Word to the wise: if you’re diagnosed with a life threatening disease, don’t write a New Yorker Magazine length article telling us you’re going into semi retirement and here “...are the plans for my next few years...” because it’s a jinx.  Roger Ebert, famous film critic for the Chicago Sun-times did that just the other day.  And he died yesterday at the age of 70.

I’m Wes Richards.  My opinions are my own but you’re welcome to them. ®
Please address comments to wesrichards@gmail.com
© WJR 2013

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