What is going on with corn prices? Why? To what extent is this both good news/bad news? How should farmers decide what to plant? http://www.economist.com/node/17257767
17 Comments
10/20/2010 01:37:20 pm
Corn prices are going up because we have a surplus in supply of corn, which is decreasing demand, hence raising prices. This is good news, because we don't need to worry about not having enough corn to make all of those products that have corn in them (i.e. every form of junk food: soda, chips, etc.). However, it is a negative because this will, in turn, drive up prices of corn and other products that use corn. Farmers should plant less corn plants for the future year/s, which will bring the supply and demand curves back to equilibrium.
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Jonathan Cazet
10/20/2010 02:22:10 pm
I agree with what Gabe has said. Supply and Demand with corn is resulting in a decrease in demand and a rise in prices. The good news to this, like Gabe mentioned, is that High Fructose Corn Syrup products are not a necessity to surviving or in any means healthy for you. But, the negative effect will damage ethanol producers. Now a days with more and more people thinking more "green" like, which means loyal customers will be lost if prices sky-rocket. I believe farmers should grow more food products, not just corn, as mentioned in the article. This way, with a little bit of everything, the farmers will have a head start to producing whatever product is the most valuable in the future years to come.
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Charles Bertoli
10/20/2010 02:23:24 pm
The demand for corn, in America and elsewhere, is so great that the price of corn is relatively easy to raise. Personally, I'm surprised the price hasn't been raised more since it is used universally worldwide, being used in everything from high-fructose corn syrup to toothpaste to housing materials (thank you 9th grade humanities). However, it probably isn't a great idea for farmers to plant any more corn since there is already a surplus of it, producing more would not be any more effective if there is already leftover corn not in use. The demand for corn in the U.S. will not likely exceed the amound supplied in the near future.
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Andrew Abdalla
10/20/2010 03:18:36 pm
The world is particularly reliant on three crops, that of corn, wheat, and soybeans. Corn, in particular, is so widely used; the anticipated drop in this year’s production was expected to pose a serious problem, thus underscoring the importance of maintaining continuity in its production. However, the lower corn yields are sufficient to cover the world’s current level of consumption, which has mitigated any potential damage. Further, I disagree with Gabe. Until we find a suitable alternative to replace widespread corn use, lowering corn production will cause the unacceptable termination or large-scale reduction in the supply of many products. Corn producers should instead continue to match their production with estimates for consumption so a steady supply of corn can be maintained. This supply and demand balance will allow everyone from cattle producers to the makers of most medications to continue to offer their products to the world.
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Victor Almanza
10/21/2010 04:44:52 am
The corn prices are increasing because we have a surplus in supply of corn which allows to decrease the demand, thats why the prices are going to go up. i personally think that this is a bad idea that the only product being surplus of supply is corn. Should there be more products in the market not only corn.
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gabriela acuna
10/21/2010 06:32:30 am
The corn production went down due to harsh summers. corn has gone up to $5.88 a bushel! this is bad becouse corn is used foe many things like for producing ethanol for fuel, its a crop eaten by people and livestock. for whatever reason it may be corn is needed. its hard for farmers to know which crop will be most profitable since other crops prices are going up. also problems in one coumtry could bring problems to other global markets. "The country harbests two fiths o the corn and probides nearly 60% of global exports."
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Corey Barrett
10/21/2010 08:53:49 am
the corn prices are high because the surplus in corn itself which allows a decrease in demand. corn will always stay high unless due to a condition which corn can't be produced
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Cristy Avina
10/21/2010 11:22:24 am
The production of corn has significantly gone up, probably because the demand for it has been high since some time ago. Thus, many people have decided to produce corn and surplus has been created since demand hasn’t increased at the same rate. But because the world is still so reliant on corn, prices have been allowed to stay high. As for deciding what crop to plant, they should take into consideration how many other farmers plan to produce the same product. I think they should focus more on the demand and dependency on a certain crop because that usually indicates producers’ ability to control the prices they sell their products for.
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Kyra Boselli
10/21/2010 01:18:01 pm
As the supply of corn has decreased due to a lower yield in crop because of weather conditions, demand has increased because of the shortage. In order to cover for their losses, or the smaller harvest, producers needed to increase prices exponentially to get a return on investment. The consequential demand increase also gave producers leeway to increase prices even further. While this is good news for producers, corn is used throughout the United States and the world for everything from ethanol to livestock feed and people feed. I think it's necessary for producers to keep corn at reasonable prices, to both encourage the exploration of using ethanol instead of fuel and to keep corn affordable families who depend on it. The increase in the demand of corn could also be good news, however, as corn is one of the United States' main exports and the government can profit from these increases in prices. I think that now that farmers are making more money on corn, more will be interested in investing in producing corn. However, prices can just as easily decrease. Farmers should look to producing a product that has a steady supply and demand curve.
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Adriana De Haro
10/21/2010 01:44:30 pm
now that corn supply has decreased, the prices are more likely to rise. because of the demand for corn. now a days many products have con in them, which makes it hard to fine a substitute for corn. with the U.S. producing two- fifths of the worlds corn, this is a problem world wide not just here. and if prices go up, country's might look towards other country with cheaper corn, causing the U.S. farmers to loose money. Which leads me to why farmers should plant other crops, mostly crops that people depend on. for if they do raise prices they wont have a total decrease in income they would make there income from another product to.
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Cole Ballentine
10/21/2010 01:54:54 pm
Corn prices are high due to a low surplus of corn. The prices are so high because the industry needs to build up for the following year so that it is stronger in this area of merchandise.
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Hadley Bickford
10/21/2010 02:00:11 pm
Corn is only one of the many products that are being sold for higher prices recently. The reason for this can be found in an imbalance in supply/demand. The high prices are a result of a surplus in the supply of the product, in this case corn. This, in turn, produces a smaller demand for the product, due to the fact that it is more expensive. Because corn so often worldwide, raising prices is a simple way for producers to generate a larger profit, while buyers will still purchase it because of its neccessity.
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Colby Benge
10/21/2010 02:08:17 pm
Like people above have clearly stated the corn prices are going up because we have a surplus in supply of corn, which raises prices, causing decrease in demand. this is not good because all the products that use corn are going to have a huge spike in prices due to the cost of corn. But the good news is that we will have enough corn for those companies. And what i feel that the farmers should do for their next crop is to grow a little less so that it will balance out the market.
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Charlie P. Boden III
10/21/2010 02:10:08 pm
Since the prices of corn and other agricultural products have risen, the demand for them has lowered, which should have a positive affect in that the prices the suppliers have set will drop, thus raising the demand of corn. the farmers, the next year should plant less, so they could have a high demand and sell it for more or even plant more, to sell it for less, maybe to make up for this past year.
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Amaury Avalos
10/21/2010 02:29:48 pm
Because of increasing temperatures, America’s Corn Belt has failed to provide its usual supply of corn causing prices to shoot up. This becomes good news to the farmer who grew these crops because he now gets more money for his crops than what he was expecting. However, livestock farmers will receive the bad news because the bushel price has risen to $5.88. This would cause the livestock farmers to own less livestock or to accustom their livestock to fewer feed ultimately causing a shortage in the dairy, beef, and poultry, products which would make prices for these products rise as well. Farmers should continue to plant whatever they know how plant and whatever they know how to plant in the amount that they are used to. Because of temperature, less corn was produced. It was not a man-made error but a natural ordeal. Temperatures vary from year to year; perhaps a different crop will be affected next year.
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kelsey bill$
10/21/2010 03:44:47 pm
Due to a surplus in corn the demand has decreased leaving prices high in the corn production. This is good news beause we have a lot of corn, but bad for the people buying. Farmers should not plant as much corn to prevent a surplus in the future
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Mikhayla Crawford
12/8/2010 12:53:46 pm
Because of climate/weather change in the crucial corn growing area of America the usual supply of corn failed to provide its usual crop thus causing the price increase. But other country's dependance upon America for our corn contributed to these sky high prices, along with the fact that there is a surplus of corn anyhow. This benefits the farmers because they are able to sell their crop at a high price, thus more money for them. But the negative effects of this will be felt in the consumer world, where things are being bought the prices of products containing corn will be higher. Well i think farmers should plant less corn considering we already have a surplus of it, but when deciding what and how much to plant they should look at the patterns from past years and the predictions for the following year a base their planting off of that so that there is enough for supply but not an absurd surplus to hopefully in turn keep the prices at equilibrium.
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