So far outside the box you can't even see the box from here.
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Friday, July 20, 2012
King Corn abdicates
It’s looking bad for the this year’s corn crop. Heat and drought in the nation’s heartland are taking a toll. What corn that is produced may cost a lot more to ship. Low water on the Mississippi is shutting down barge operations causing shippers to resort to more expensive trains and trucks.
Food is going to get pricey. Not much corn is actually eaten as plain corn, but it has been the cheapest sugar on the market so it’s used in just about everything. Corn also has a major role as an animal feed. Expect the price of meat to go up.
Then there is energy. Ethanol derived from corn is a significant portion of our liquid fuels.
What will happen? Nations that depend on cheap American corn for food are going to experience unrest. A major component in the Arab Awakening is rising food prices. It’s going to get uglier. Cheap US corn destroyed Mexico’s local corn producers -and now the price is going up.
Will fuel get more expensive at the pump? By rights it should, but collapsing world economies may keep the price down for a while. Of course, if it’s your personal economy that’s collapsed you won’t be buying much fuel either.
I’m not a big fan of corn. It’s a heavily genetically altered plant that relies on chemical inputs and is grown on a massive factory scale. High fructose corn syrup is something I’ve cut out of my diet -and feel better for it. Ethanol fuel has ethical issues. Is is better to feed American cars or poor people? It’s not even a very efficient way to produce fuel, just barely producing a bit more energy than it consumes.
Even though I don’t eat any corn and prefer grass raised meat, I’ll suffer along with everyone else. When a major grain like corn is in trouble, all food is going to go up in price. Stock up on food now while you still can.
One problem will most likely go away. Boaters have been worried that the government would approve E15 gasoline. That’s 15% ethanol as opposed to the 10% currently allowed. The current formula has been very bad in the marine environment so the 15% was expected to be much worse. My guess is that there won’t be even 10% ethanol in that E10 gasoline.
Being so hugely dependent on one major food crop has always been a recipe for disaster. It was bad new for the Mayans. Reliance on potatoes was bad for the Irish. Of course, corn production has been terrible efficient and therefore cheap. The problem is efficient systems are often fragile.
I live in an area of NH known as the Great North Woods. I'm in my dome-i-cile out in the county with my lovely wife and a varying number of family and friends
-part red neck, part hippie but all country. Experimenting and enjoying the adventure of life.