The Drought and Food Prices...

[cobraclone71]

With the ongoing drought situation and concern starting to grow over the cost of food in the upcoming months, I thought it would be interesting to do some math and see what the climbing commodity prices could mean for consumers.

1 bushel of wheat = roughly 100 loaves of bread

Wheat was roughly $6/bushel back in June during harvest and is now pushing $9/bushel.

So, essentially the cost of wheat per loaf of bread will increase from $.06 to $.09.

The cost of production shouldn't change at all, only the input cost to make the bread will increase, and it wont be that dramatic.

I realize this is only one specific situation, but I thought is was interesting to pass along.

[Daserop]

And years after the drought is behind us the prices at the supermarket will be the same price. just like gas.

[CYVADER]

corn. $5 to $9. feed cattle, make ethanol, make corn syrup/etc. its way bigger than a loaf of bread

[JP4CY]

I'm so glad a friend of ours is letting us get in on a cow with his family. Got a 1/4 coming in a couple weeks.

[cobraclone71]

corn. $5 to $9. feed cattle, make ethanol, make corn syrup/etc. its way bigger than a loaf of bread

Like I said, this is just one instance. 2 things to add...

There is still a lot of feed value to corn even after it has been through an ethanol plant (dried distillers grains)

When it comes to corn syrup, Americans could cut back on pop and we both know it

[rebecacy]

organic market share will fall, some.

[Cyclonepride]

Monetary policy does the same thing to food prices (and all other prices too). I'm more concerned about that, since it is within our control.

[bugs4cy]

Like I said, this is just one instance. 2 things to add...

There is still a lot of feed value to corn even after it has been through an ethanol plant (dried distillers grains)

When it comes to corn syrup, Americans could cut back on pop and we both know it

Varying with the weather at corn dent, we could see hot spots of aflatoxin. When aflatoxin grain goes through an ethanol plant, the aflatoxins are concentrated 3X in the DDGs. Zero aflatoxin can be fed to dairy. Some level to cattle.

That is, if the ethanol plants are still running because ethanol don't pencil w/ $8 corn - and they have water use permits because they use a large volume of water a day. The permits could be curtailed if their water usage is projected to cause quantity issues for human and livestock uses.

[kingcy]

Varying with the weather at corn dent, we could see hot spots of aflatoxin. When aflatoxin grain goes through an ethanol plant, the aflatoxins are concentrated 3X in the DDGs. Zero aflatoxin can be fed to dairy. Some level to cattle.

That is, if the ethanol plants are still running because ethanol don't pencil w/ $8 corn - and they have water use permits because they use a large volume of water a day. The permits could be curtailed if their water usage is projected to cause quantity issues for human and livestock uses.

Aflatoxin is always a scare in dry areas but never really seems to be a big deal.

[Let's Go State]

So much of food prices today are wrapped in high margins leaning on brand awareness. Commodities are mostly only realized in meat and dairy.
Wheat is the most irrelevant.... But realize that any halfwitted marketing guy at Kraft and Con-Agra will ride high commodity prices as an excuse to raise prices and grab more margin.

[Wesley]

Drought?s Footprint - Graphic - NYTimes.com