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January 19, 2011

Increased demand and pricing implications of corn industry

Corn farmers who came to St. Louis for the National Corn Growers Association's Priority and Policy Conference enjoyed a presentation by Bruce Scherr, CEO of Informa Economics and one of the nation's leading agricultural economics research firms. In his presentations, Scherr reviewed the historical trends in corn prices and looked at how changing global demographics are shifting the agricultural commodity market paradigm.

"What we see in increased corn prices today is the ripple effect of economic expansion," Scherr said. "The expansion of commodity values is not over. It's just beginning." Noting that commodity prices remained, on average, stagnant for three decades despite significant inflation in the market as a whole, Scherr explained that it is essential to keep current price increases in perspective because prior values were unsustainably low.

He also pointed out that, while demand initially surged, increases have leveled off and are now trending to more gradual growth. In light of increased demand, Scherr pointed out the importance of remembering that the United States has never actually run out of corn despite major demand increases. When needed, farmers boosted production by as much as 2 billion bushels. Read more...

This blog is written by Martin Little The Global Miller, published and supported by the GFMT Magazine from Perendale Publishers.


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