This time last year severe drought and extreme heat brought corn prices to a record high of $8.31 a bushel. This year, however, U.S. farmers are facing the opposite problem -- a rainy season that has led to a boom in corn production and falling prices -- down to $4.65 a bushel. This year’s crop is expected to reach 14 billion bushels -- up from 10.8 billion in 2012.
The 40% decrease in in corn prices is hurting farmers who saw their incomes surge to their highest levels since the 1970s.
The opposite is true for consumers. “We will start to see prices ease when we’re looking at meat products, when we’re looking at milk, chicken, all of which is related back to the use of corn as feedstock, therefore as the price of corn goes down we see a positive impact on our wallets,” says Paul Walsh, Vice President of Weather Analytics at The Weather Channel.
Chipotle Mexican Grill (CMG) was considering a price increase because of rising food costs but has said that it will now keep prices the same.
Corn prices floated around $2.50 a bushel until 2008 when growing demand from the ethanol industry brought prices up. Some predict that prices will continue to fall – Goldman Sachs has lowered its 12-month outlook to $4.25 a bushel.
Watch the video above to see when Paul Walsh expects prices will fall at the grocery store.
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