Farmers Struggling Despite High Corn Pricesby Brad Warbiany
With record-high corn prices, and plenty of subsidy money floating around, an interesting thing is happening. Less farmers are growing corn!
Why? Because the inputs used in growing corn are rising in price even more quickly:
The amount of corn planted in the U.S. is expected to dip this year. Rice acreage in California, which sells as much as half its crop overseas, is predicted to increase by only a small amount. Instead, farmers are planting cheaper-to-grow wheat and soy.
They say the reason is simple. The cost of planting some crops is rising as fast as their prices, and sometimes faster, leaving little incentive to increase production of some foods that remain in high demand around the world.
Farmers typically plant their crops once a year and not all of them cost the same to produce. Both corn and rice, for example, require more fertilizer to grow and fuel for farmers to tend than other crops. As the prices of those supplies rise faster than the prices of some commodities, farmers are shying away from some expensive crops.
This, of course, came as a bit of a shock to me. I never realized that corn was so resource-intensive to grow. So much so that the cost of growing corn makes it barely sustainable, even with the subsidies and record prices caused by high demand.
But that raises another question. If corn is a very resource-intensive crop for us to grow, why in hell would we want to use it as a fuel source?!