The nation is experiencing its worst drought in over half a century. Grain crops, particularly corn, are being devastated as only 31% of the domestic corn crop in is good shape versus 40% just one week ago. The same is true for soybeans as only 34% is in good shape versus 40% last week.
As a result both commodities have hit record highs on the world futures market. For the first time in history corn exceeded $8.00 per bushel to $8.05 (one year ago--$5.50) and soybeans are at a high of $17.12 per bushel ($10.90 a year ago). It is projected by some commodities experts that these price may go up yet another 20-30%. The inflationary impact of these vital grains will be felt very soon in the nation's grocery stores as virtually all meat and many processed foods are dependent on these commodities. This on top of an economy that is already languishing in recession levels.
However, the government still insists that over 40% of the nation's corn crop be diverted to ethanol and burned in our cars. When asked, the current Secretary of Agriculture, Tom Vilsack, rejected calls for corn to be diverted from ethanol production to alleviate the expected shortage of grains for human and animal consumption.
The level of loyalty to radical environmental policies apparently know no bounds as the price of corn, while a major problem for America, is devastating for many third world countries that depend on corn and soybeans for the majority of their diets. The United States accounts for one-third of all corn, soybeans and wheat traded on the international market. It was similar inflationary and food shortage problem in 2009-10 that fomented much of the Arab Spring and food riots throughout many parts of the world. Additionally China, the world's largest importer of soybeans, is already experiencing food inflation, which will add to the slowing down of their economy and thus the global economy as the United States is stuck in an economic quagmire of its own making.
While wheat and some other grains are in still in somewhat plentiful supply, the pressure to substitute those for corn and soybeans has caused those price to rise as well. Wheat is currently selling for $9.25 a bushel versus $5.77 a year ago). The future of the American and global economy is becoming more bleak by the day and there is an administration in Washington D.C. that doesn't give a damn.