Chicken Market Update- Week of 7/30

· Corn and soy prices are the main topic of discussion the last few weeks. These are the components of chicken feed. The Midwest drought has brought the feed cost to all-time highs, most protein producers are currently liquidating herds and flocks now, as feed cost has risen.

· At the poultry level, the producers are working six days a week to bring bird weights down now, as the feed conversion later on will be too expensive to maintain.

· So now a jumbo bird takes 62 days from start to finish, they begun to lower weights and feed only 58-59 days going forward. This will cause extra meat on the market this week and next, but after that the shorter feed cycle will lower weights 5-8% going forward. This should help lower supply and feed cost into August.

· After that, they better start thinking of cutting back head count, otherwise a sea of red will be waiting for them.

· Most items are in relative good shape and actually short on wings and tenders. Bnls breast meat seems to be the most troublesome currently, but after bird weights are lowered, it too should tighten up.

· Most dark meat is balanced, with leg and thigh meat in higher demand.

Mobile Slaughterhouses: Fueling the Food Movement

On Monday we talked about how people are turning to local farmer's markets to buy eggs from local producers rather than the mass-produced stock generally available in the grocery store. What about meats?

With the exception of a small few, selling proteins at the farmer's market has been difficult, in part due to the process and cost of loading cattle and driving hours away to a slaughterhouse. The mechanical end is also a deterrent for those who pride themselves on raising organic, humanly kept animals.

The answer is in the fast growing niche industry of the mobile slaughterhouse. The Chicago Tribune has more:

With a mobile slaughter unit, usually built on a flatbed truck, a local farmer can have small numbers of animals slaughtered on or near the farm, then sell the meat to neighbors or at farmers markets. Many supporters argue that mobile slaughter units, which might handle only five cows a day, better promote food safety than slaughterhouses that process thousands of animals.

"There's a lot of enthusiasm for this," said Arion Thiboumery of Iowa State University, who has studied mobile slaughter units. "In large plants, the animals go by real fast. This is much smaller, so it's slower. Many people say it's safer."

The nation's first federally inspected mobile slaughter unit — the units travel with an inspector — started in Washington state. Today, Thiboumery said, there are about 20 mobile slaughter units for poultry and a half-dozen for cattle around the country.

Would you buy meat from a mobile slaughterhouse?

Further Reading:
Slashfood.com on the new trend
A metafilter.com user has first hand insight into the mobile slaughterhouse phenomenon

Surprise! Feedlot Beef Greener than Grass Fed

A new study out of Australia found that the often-held suspicion that cattle fed via feedlot have a larger carbon footprint has been deemed as false. FoodSafetyNews has the story:

According to a University of New South Wales study published in the journal Environmental Science and Technology, Beef produced in feedlots has a smaller carbon footprint than meat raised exclusively on pastures. The study also found that the greenhouse gas impact of Australian beef and sheep meat production is equal to or lower than that of livestock raised in many countries.

TruthAboutTrade.org backs up the new findings and parallels them to findings in the US:

In 2007, 13 per cent fewer animals were slaughtered than in 1977 (33.8 million versus 38.7 million), but those animals produced 13pc more beef (26.3 billion pounds of beef in 2007 versus 23.3 billion lb. in 1977). By producing more beef with fewer resources, Dr Capper found that the total carbon footprint for beef production was reduced 18pc from 1977 to 2007. "As the global and national population increases, consumer demand for beef is going to continue to increase," Dr Capper said. "The vital role of improved productivity and efficiency in reducing environmental impact must be conveyed to government, food retailers and consumers." Compared to beef production in 1977, Dr Capper found that each pound of beef produced in modern systems uses:

• 10pc less feed energy;
• 20pc fewer feedstuffs;
• 30pc less land;
• 14pc less water; and
• 9pc less fossil fuel energy.

In addition, modern beef production produced 18pc fewer total carbon emissions (methane, nitrous oxide and carbon dioxide) than in 1977.

The "Little Guys" React to the Proposed New Rule.

Yesterday we looked at how the large meatpacking corporations were reacting to the USDA new proposals, today we will round up the opinions of the livestock ranchers the changes are hoping to protect.

The National Sustainable Agriculture Coalition applauded the proposed regulations:

"These rules are crucial to restoring a level playing field for independent family farmers," said Martha Noble, senior policy associate with the NSAC. "Undue and unjustified price preferences for industrial scale factory farms have caused substantial harm to markets, small and mid-sized farmers, and rural communities."

In their statement, the American Farm Bureau stated:

For too long producers have had to bear the financial hardship of being at the whim of production contractors, resulting in inequality in production practices, increasing losses and decreasing profitability. The GIPSA proposed rule would level the playing field.

And finally the Center for Rural Affairs wrote that not only will the new changes "help restore competitive markets and contract fairness to the livestock and poultry markets," the rules will also affect the lack of enforcement of the Packers and Stockyards Act:

"These sweetheart deals for large volume producers have become commonplace, but no less a violation of the Act," said Crabtree. "Six cents per pound may not sound like much of a discount, but, for a family farmer with 150 sows in a farrow-to-finish operation it amounts to receiving $56,000 less annually for hogs of the same quality, simply because he markets fewer hogs - in the end, that's what this rule needs to put an end to, that's what we set out to accomplish with this rulemaking provision in the farm bill."

How many of the proposed changes actually stick remains to be seen, but it certainly looks like a case of David vs Goliath.

Swine Flu & Pork Industry Information

Even though health officials have denied that the "swine flu" came from pig farms, the media seized on the Smithfield plant in Mexico because of its proximity to the initial outbreak. Despite the fact that plant workers or the pigs are still healthy, Smithfield stocks dropped earlier in the week. With fear of losing even more profit in an already tough economy, the pork industry fought back to change public perception and remind people that according to the Center for Disease Control:

Can people catch swine flu from eating pork?
No. Swine influenza viruses are not transmitted by food. You can not get swine influenza from eating pork or pork products. Eating properly handled and cooked pork and pork products is safe. Cooking pork to an internal temperature of 160°F kills the swine flu virus as it does other bacteria and viruses.

Today the Pork Producer's Council released this statement:

“The restrictions should be short lived because U.S. and international authorities have made it clear that the H1N1 virus is transmitted through human contact and that pork is 100 percent safe to consume,” said NPPC Vice President and International Trade Counsel Nick Giordano. “NPPC has been in constant contact with U.S. trade officials, and U.S. Agriculture Secretary Tom Vilsack and U.S. Trade Representative Ambassador Ron Kirk have been busy working the phones with our trading partners. It is imperative that our trade officials stop the export bleeding now.”

The World Health Organization (WHO) today named the virus “Influenza A,” and the World Organization for Animal Health (OIE) said the H1N1 influenza should never have been named “swine” flu and there is no justification for the imposition of trade measures on the importation of pigs or their products. The U.S. Department of Agriculture, Centers for Disease Control and Prevention and the U.S. Department of Homeland Security all confirm there are no food safety issues with the virus and that it is not in the U.S. hog herd.

Swine Flu (or Influenza A) still has no vaccine, but as of this post only 109 confirmed cases have been found in the US, with only one death occuring in the country.

Further Reading:

A Brochure from the CDC about Swine Flu and pigs. (opens a PDF)
Reuters on pork farmers urged to reduce flu risk.
MeatInfoUK on the rejection of claims that pig farms have caused the flu.
BNet on the flu's impact on the pork industry

Winners & Losers of 2008 Part 2

Winner: Comfort Foods

Tough times call for familiar favorites on the dinner table. Despite the shrinking amount of product packaged in the same size box due to high production costs, Family staples such as Kraft Products and General Mills all posted profit increases last quarter. Forbes has more:

Kraft - which also sells the equally palliative Jell-O - posted a 7% increase in revenues last quarter and upped its yearlong sales guidance; Cheerios-maker General Mills boosted its net sales by 14%.

Loser: Organic Foods

While many grocery stores just got done redesigning their departments to highlight organic products, inflation really hit the organic industry toward the end of the year. Boston.com has more:

Market research firm NPD Group said the number of people who reported buying organic products fell 4 percent in August, compared with a year earlier. While more than one in five surveyed in the latest figures available from NPD purchased organic products, the August data represented the first customer losses for the sector since February 2006 -- a decline that is expected to accelerate in the months ahead.

Winner: Liquor

Despite a rough end of the year for wineries, the economy is not dampening liquor sales. Premium brands are still hot sellers, and the legalization of Absinthe into the US has helped launch some newer distilleries, such as Portland's Integrity Spirits- one of the only domestic producers of Absinthe, into the national limelight. A quick trip over to NotCot's Liqurious can prove to anyone that a good drink is still in fashion.

Loser: Soda

2008 saw the failure of diet soda to make a profit in schools, and the New York Health Chief appearing on Youtube to try and get people on board with a "soda tax" isn't exactly making any new friends. The TimesUnion.com states:

No matter how justifiable Dr. Daines' argument might be on the merits, or demerits, of soft drinks contributing to childhood obesity, the minute he began to lecture ever so gently on why this 18 percent tax would be good for us, he lost the argument.

And to add salt to the wound, MSNBC and Prevention Magazine listed diet soda in their 8 foods to avoid list:

In a 2008 study, researchers linked drinking just one diet soda a day with metabolic syndrome — the collection of symptoms including belly fat that puts you at high risk of heart disease. Researchers aren't sure if it's an ingredient in diet soda or the drinkers' eating habits that caused the association.

Most talked about food of the year: Corn

Corn was cast as the hero and the villain as we spent the first half of the year debating food vs fuel. Corn was blamed for any changes in prices or shortages, while simultaneously heralded for high profit margins. When the midwest flooded in June, everyone waited with baited breath to see how it would effect the crop, and it looks like we are not out of the woods yet.

When prices dipped in the remaining months, ending -12.37%, farmers were hurt by shrinking profits, and the fact that it took more than $2.00 to raise a bushel of corn that might sell for less than that. The Cattle Network has more:

But until there is a concrete turnaround, Hurt says demand for US corn continues to depreciate, such as the 300 million bushel downward adjustment in USDA’s estimate for corn used by ethanol refineries and a 100 million bushel drop in the estimate for exported corn.

It looks like corn will continue to be a big story into 2009.

What were your winners and losers for 2008? What are you looking forward to in 2009? Let us know in the comment section below, and have a Happy New Year!

Let's Talk Turkey

Because you haven't heard enough about food price inflation, the Wisconsin Farm Bureau Federation chimed in with their annual report about the average price of a Thanksgiving dinner.

And you guessed it; prices went up.

The price tag on a meal for a family of eight will cost $42.37 this year. The 2007 cost was $39.66 for 14 items. The grocery cart was comprised of: 16-pound self-basting turkey; 14-ounce package of herb-seasoned, cubed stuffing; 30-ounce can of pumpkin pie mix; a package of two, nine-inch, frozen pie shells, a three-pound bag of sweet potatoes; a five-pound bag of potatoes; 12-ounce package of brown-and-serve rolls; one-pound package of frozen peas; a half-pound each of fresh carrots, celery, and onions; 12-ounce package of fresh cranberries; one gallon of whole milk; and a one-half pint of whipping cream.

The Capital Times has more:

Potatoes had the biggest price jump from last year, up 32 percent from $2.19 a 5-pound bag in 2007 to $2.90 this year.

The Farm Bureau said fewer acres of potatoes were planted this year and poor weather early in the year contributed to a smaller crop and the resulting higher prices.

Dairy prices and global demand shot up in 2007 but subsided in 2008, so the cost of a gallon of milk in this market basket survey was up only four cents to $3.39 a gallon from the 2007 survey. Last year, the price of milk was 66 cents higher than the year before.

Sweet potatoes were down 15 cents for a 3-pound bag, dropping to $1.11 a bag from $1.26 in 2007.

The study, which has been going for 17 years, also found that the price had risen 60% since it's inception. The original price of the meal in 1991? $26.50.

Don't let all of this talk of higher prices ruin your Holiday feast. The Ventura County Star reminds us that a meal for eight totaling around $45.00 is still cheaper than calling for take-out:

The total tab is cheaper than most people might spend taking a group out for a pizza dinner, said Jim Sartwelle, a federation livestock economist.

"It kind of highlights how you can stretch your food dollar by picking bulk, nonprocessed food items," he said. "Thanksgiving is that one day of the year that most of us feel like we don't really mind being in the kitchen."

If one wanted to sidestep the grocery stores and get their own bird, the Oregon Department of Fish and Wildlife announced on Friday that they still have lots of turkey tags available. An Oregon resident can expect to pay $18.00 for their turkey hunting tag. You can read more about wild turkey hunting at KPIC.com, or via this brochure (PDF file) from the ODFW.

Don't want turkey at all? Dining@Large has a top ten list of turkey alternatives. Here are the top five:

* Wild duck with sauerkraut

* Goose with fruit stuffing. Unfortunately the one time I cooked a wild goose (a hunter friend had brought it to my in-laws), it also contained buckshot.

* Native American foods like beans, squash and corn for vegetarians and vegans

* Turducken (partially boned turkey stuffed with boned chicken stuffed with boned duck)

* Small roast chicken with cornbread-pecan stuffing for a couple or people eating alone

If you do decide to cook a turkey, make sure you have the Butterball Turkey Hotline number ready (1-800-Butterball). Lots of people laugh at the idea of needing to call for help, but Snopes.com reports that "incidents" do happen:

One of the more unusual questions handled by Butterball's Turkey Talk-Line (which the company has operated since 1981) comes from those who have mistaken a well-traveled joke for an actual recipe: They call to ask if they can pop popcorn in the turkey's cavity during the roasting process. (The joke's punch line is: "You know the turkey is done when the popcorn pops and blows the rear off the bird.") And no, you can't.

For the official word on how to cook a turkey, look to the USDA. They have an extensive guide on how not to sicken your dinner guests.

And finally, Simply Recipes will tell you exactly what to do with all of those leftovers!

Pacific Food Distributors wishes everyone a
happy, delicious Thanksgiving Holiday!

Two Sides of the Corn Story

MarketWatch published an article last Friday which highlights a controversial new report coming out of Canada: high corn prices over the summer were directly linked to speculation, not ethanol. While most critics were quick to blame ethanol for the high jump in corn prices, an independent company called Global Insight has issued a report stating that commodities speculation rather than ethanol production was the cause of the spike in corn prices.

MarketWatch goes on to point out that while the US corn rose to above $8.00 per bushel, Canadian corn prices stayed under $4.00:

Ethanol production in Canada is up, and yet the price of corn is now at a more moderate levels. Ethanol cannot now stand as the cause of food prices increases - the facts don't support it," said Gordon Quaiattini, President of the Canadian Renewable Fuels Association. "We have always maintained that record oil prices and speculators were to blame for the increase in the price of food this summer.

While most of America waits for the lower corn prices to translate into lower grocery prices, the drop in price per bushel does not mean things are getting easier for American farmers. USA Today reports:

Schnitkey says it will cost corn farmers in central Illinois about $4.02 on average next year to produce a bushel of corn. Fertilizer, seed, energy and land prices have risen sharply, though lower oil and diesel prices could ease the pain a bit.

David Kappelman, senior vice president of the Premier Community Bank in Marion, Wis., says farmers are holding off buying fertilizer for next year in hope that prices will come down. That may not happen, given that suppliers were forced to lock in inventories early. He expects the credit outlook to come into focus early next year as suppliers start pressing farmers for commitments.

"Agriculture is cyclical. We've had a pretty good run, and that run might be behind us," Kappelman says.

Speaking of that credit outlook, MSNBC has a report on the agricultural sector and the credit crunch:

Everyone from crop farmers to livestock producers will be paying more for money they borrow on top of production costs which have been climbing in the past few years.

"I would say that everybody's pretty cautiously concerned," said Don Langston, a longtime cotton producer in Texas, the nation's leading producer of the fluffy fiber and the nation's No. 2 agricultural state.

Agriculture economists say farmers will simply need to adjust, whether that means looking for operational efficiencies, selling assets to raise cash or purchasing crop insurance to make sure they can repay loans.

There is a bright spot in all this for meat eaters, economists said. An anticipated decline in demand from overseas means there should be plenty of beef, at reasonable prices, for U.S. consumers.

Has the credit crunch affected your business? Do you think farmers will just have to adjust to the new corn economy after years of high profits, or will the market even itself out again? Comment below and let us know your feelings.

Further Reading:

The Cattle Network on how consumers are willing to spend more money for premium meats.
The Cattle Network on livestock highlights.
The AP on Ag futures for Monday.

How will the bailout effect food prices?

Cartoon By Lisa Benson


On Friday President Bush signed the 700 billion dollar bailout bill, with hopes that the money would unfreeze credit markets and keep the country out of a deep recession. Although the bill, or the add-ons places to pass the bill do not have anything that directly helps the food industry, the Telegraph Herald explains how, if the bailout works, it could keep the food chain from facing disaster:

"Without credit, the whole system just locks up. In Iowa, farmers borrow money to plant their crops. Then they sell their crops to pay the loan down. If we don't have that first step, then nothing happens."

The passing of the bailout did not amount to much for the commodity markets at the end of the week. Corn closed at $4.54 per bushel, even after a surge earlier in the morning. December wheat rose to $6.40 a bushel, and November soybeans fell to $9.92 a bushel. While declining prices may seem hopeful, the Des Moines Register reports that the prices have now dropped to a point where farmers will barely be breaking even:

......speculators have lost their desire for corn and soybeans. The financial turmoil on Wall Street and in Congress this week caused speculative money to stay away.

Accordingly, corn prices have done a graceful dive from $8 per bushel to $6 per bushel by early September and then falling 16 percent last week to $4.55 per bushel for the December contract on the Chicago Board of Trade, the lowest price in 10 months. Iowa elevator cash prices dipped below $4 per bushel at several locations last week, and the state cash average was $4.12 per bushel.

Those numbers are ominously close to farmers' break-even costs, driven higher this year by rising prices for diesel, fertilizer and rents.

"If the price of corn dips to less than $4, you'll see farmers just put the corn in their bins and let it sit there until prices improve," said Urbandale commodity broker Tomm Pfitzenmaier of Summit Commodity Brokerage.

Farmers who don't want to sell their crops immediately can store their grain either in their bins — or at elevators. Either option involves extra costs to the farmer, either in the cost of the bin or the potential for moisture or disease damage, or the payments to the elevator.

To punctuate the costs on farmers in recent times, the USDA Chief Economist Joseph Glauber spoke to how biofuel is effecting food prices. At the Agricultural Markets and Food Price Inflation conference in Chicago on Thursday, Glauber stated that while biofuel is only having a 10% impact on food inflation at a consumer level, the effect of biofules on raw commodities is much larger. AgWeb.com reports:

“The impact (of bio fuels) on the raw commodities is pretty large - corn on the order of 30%, soybeans on the order of 40%,” Glauber said. “However, the impact on food prices varies quite a lot.”

Glauber noted that the price of products such as vegetable oil and high fructose corn syrup are much higher due to higher corn and soybean prices.

Further Reading:

MSNBC on how the economy is helping and hurting therestuaunt industry.
MarketWatch on the wrap up of commodity markets for the week of 10/3/08
CNN on will the bailout work?

COOL is Here.

With the Country of Origin Labeling Law going into effect this week, there is confusion over interpreting the law, how exactly to comply, and where to find the correct information. This week we will focus on some of the new information coming out as the deadline approaches.

The Arizona Daily Star has a great refresher course of the law and how it will affect consumers and wholesalers alike. You can also read our previous post, Are You Ready for COOL? for the fundamentals of the labeling law.

Even though they have had over six years to fix the matter, people are finding loopholes within the law and lawmakers are expected to address them in the next few days. The Alexandria Echo Press elaborates:

The farm bill language explicitly states exclusively born, raised and processed U.S. animals cannot be used in the multiple country category (category 2). This loophole allows packers to use the label intended to be for U.S.-born, raised and processed animals on products that are mixed with animals from other countries.

The Madison Daily Leader continues:

The COOL start-up will not take place without some last-minute concerns expressed by 31 U.S. senators, including Sen. Tim Johnson, D-S.D., who issued a press release on Thursday. The senators asked Agriculture Secretary Ed Schafer to review the department's COOL policies and correct some possible loopholes in the labeling program.

The 31 senators asked Schafer to revisit several COOL policies, starting first with a USDA rule that could allow meat packers and processors to combine U.S. meat with meat from animals that were produced in foreign countries. The bipartisan group of senators was concerned that processors could still label the product as U.S.-produced.

Despite the attempt to fix the loopholes, some argue that the new law does not go far enough. RedGreenandBlue.org presented their list of five flaws in the COOL law. Number one on the list was concern over pet food:

The law does not apply to pet food. In 2007, contaminated gluten and rice protein from China was used to make pet food, resulting in the death of thousands of dogs and cats across America. The food was also used to feed pigs, chickens, and farmed fish which entered the human food supply, but no illnesses were reported. The same pet food would be exempt from the new labeling because only the ingredients were imported, not the final product. Mixtures do not apply under the law— not even fruit salad.

At PacFoods, we have spent the past few weeks reading ourselves for the new law. Here are our top three choices for the best places to find information:

1) The AMS Powerpoint presentation (clicking this link will download the presenation directly onto your computer) on the new law is a quick, easy to navigate presentation that strips the confusing legal jargon from the law and makes it easy to understand.

2) Write the USDA directly at COOL@usda.gov. As a food distributor, it was important to know how the law affected our business. The response time was under a week, and they were able to clearly answer our questions.

3) The Frequently Asked Questions PDFs on the AMS website are updated often and also clearly break down the rules in understandable terms.

Weighing the good news against the bad.

Corn was on the rise this week- taking a 12% spike throughout the week before falling to a 6% gain by Friday. The oil price based increase came despite the good news from the USDA (via the Chicago Tribune): corn has recovered from the July flooding and will have a 3.9 bushel per acre increase from last year's yield.

Bloomberg TV had analysis on the news you can watch here. You can read their print version analysis of the news here.

The report continued the trend of tempering good news with bad news; the Consumer Price Index report was released stating that prices jumped twice the expected rate in July. US News and World Report analysts attempted to see the silver lining of the report:

Goldman Sachs economists called the CPI report "horrible" but noted that the drop in crude prices should slow the advance of energy-related inflation. They write: "The energy piece of this is quite likely to moderate in coming months given the developments in crude oil and gasoline prices (though part of that is seasonal). The food should also slow, but the timetable for this is less certain."

How are local restaurants surviving the downturn in consumer spending and the increase in costs? NWCN.com recently reported on the Newport Bay and Stanford's chains use of coupons to lure customers back in to the dinner hour:

The coupons were sent to 450,000 homes in the Portland area. Experts said a typical return would be around 4.5 percent. So far at Stanford’s, restaurant managers said they’ve seen a 12-percent redemption.

"The response has been unbelievable," said Ideson.

In other Pacific Northwest food news, OPB ran a great article about the increasing health of Oregon farms:

We've all heard about the decline of the family farm in the U.S. and the dominance of giant corporate farms. The trouble is, in Oregon that’s just not the case. In fact, according to the latest census figures, even though farm acreage in the state has dropped slightly, there are actually more farms now than there were a decade ago.

You can read the rest of the article here.

Further reading:

KTVZ.com on Willamette Valley Farmers seeing a windfall from wheat crops this year.

Farm & Ranch Guide on the volatility in the corn market.

MSNBC on retail sales falling for the first time in 5 months.

MarketWatch on the end of the week commodity round up.

Bad Days for Tomatoes and Corn.

Food was front and center in the news this week. Flooding, salmonella outbreaks, and soaring oil prices topped headlines, and while wheat prices fell, the general mood on any possible relief for raising food costs was somber.

At the beginning of the week tomatoes were pulled off of grocery store shelves and restaurant menus after the FDA issued a Salmonella warning for raw red tomatoes. So far over 200 people have become ill, and the FDA is still trying to determine the source of the outbreak.

In the Pacific Northwest, grocery stores and farmers were quick to respond to the warning. The News-Review Today reported that places like Sherm’s Thunderbird pulled its tomatoes until learning their source was safe, while the Dairy Queen in Roseburg joined chains like Mc Donalds and Chipotle, stating they would keep tomatoes from their hamburgers at least through the weekend.

While Oregon's Caruso Produce was cleared by the FDA, other farmers were not having as easy of a time. Michael Stuart, president of the Florida Fruit and Vegetable Association, spoke to NPR about the effect the warning was having on the growers:

They're extremely frustrated in that business has basically ground to a halt at this point in time. We're anxiously awaiting a determination by the Food and Drug Administration as to what the specific source of this problem is. And until that happens, quite frankly, we're dead in the water.

You can read the entire NPR piece here.

As the nation threw out tons of possibly contaminated tomatoes, commodity watchers kept an eye on corn as prices rose all week to end at $7.357 per bushel; a new record. Major flooding throughout the Midwest destroyed thousands of acres of crops, and with forecasts predicting more rain, analysts are predicting prices could surge above $8.00 per bushel.

MarketWatch reported Monday on the already decreased 2009 corn crop, and as the week went on analysts told reporters that the flooding would have major consequences. Chad Hart, an agriculture economist at Iowa State University told the Chicago Tribune that:

Given the flooding we see today, we're likely to see prices go significantly higher based on the weather....This is a significant event. We were already having production issues before this occurred, all across the Midwest. This can have gigantic implications.

Conversely, the National Corn Growing Association's president Ron Litterer released a hopeful statement about the crop:

In Iowa in 1993, record rainfall reached well into the summer months and severely affected the crop that year. That is not the long-term forecast for 2008, and there’s still a lot of the growing season left, so we are hopeful the final results will not be as devastating as it was 15 years ago. While the U.S. Department of Agriculture has recently projected our third-largest crop ever at more than 11.7 billion bushels, we know that the final number depends on how the weather holds.

Thanks to a large surplus of beginning stocks from the record 2007 harvest, we came in with a good supply. We are watching the skies at home and tracking the updates from Washington while working hard doing what we do best – growing corn to help feed and fuel the world.

The long-term effects of the tomato and corn issues are still to be seen, but many experts are warning that we have not seen the peak of rising prices.

Further Reading:

• The New York Times on commodity prices climbing
• The Associated Press on the surge in corn prices
• Reuters on the FDA's slow moving progress on food safety