The U.S. Department of Agriculture (USDA) released its monthly World Agriculture Supply and Demand Estimates (WASDE) report and confirmed what many private analysts had already reported – the U.S. corn crop is going to break last year’s record production by a substantial amount. Total production is now projected at 14.475 billion bushels, 550 million bushels over the 2013 record. Yields, also a record, are projected at 172.4 bushels per acre, while the average price received by farmers for the 2014-15 marketing year is projected to decline to $3.40 per bushel, the lowest price in eight years. Corn stocks, projected at 2.081 billion bushels, the highest level since 2004, are likely to pressure corn and other cereal prices well into the future.
Corn used to produce ethanol, distiller’s grains and other co-products is projected at 5.125 billion bushels, while corn consumption for feed is estimated at 5.375 billion bushels.
Globally, the Food and Agriculture Organization of the U.N. (FAO) has reported that its international food price index declined 2.6 percent from August and is down 6.0 percent over the last year. The FAO noted that grain prices were down nearly 9 percent since 2013, while meat prices are nearly 22 percent higher than a year ago.
Domestically, food prices in August are up 2.5 percent compared to December 2013, nearly the same as the overall Consumer Price Index, which is up 2.1 percent for the same period. But while corn and other grain prices are rapidly declining, consumer meat prices are up 11.6 percent since last December.
“The current WASDE projections and recent reports from the FAO and Bureau of Labor Statistics further confirm that there is virtually no correlation between U.S. ethanol production and consumer food prices,” said Tom Buis, CEO of Growth Energy. “In report after report, we see that the American farmer can produce an abundant amount of food and fuel. It is clear that the food and fuel myth is completely unfounded and does a great disservice to the hardworking men and women that help feed the world and fuel our nation.
“As integrated livestock and poultry companies brag about their record profits and margins to their stockholders and investment bankers, the Turkey Federation, National Chicken Council and The National Council of Chain Restaurants, all allies of Big Oil, continue their campaign to intentionally mislead Americans about the cause of rising food prices in the U.S.”
“Corn prices are below the cost of production for most farmers, and ethanol is selling approximately $1.00 per gallon less than the gasoline on the wholesale marketplace. The unrelenting deception coming from these trade associations to continue to perpetuate this lie to mask their growing profits at the expense of the American consumer is deplorable. Their greed and deception knows no boundaries. It’s time for Big Oil and its Big Food allies to begin telling the truth.”