Buy land. They ain’t making any more of the stuff.–Will Rogers
Corn prices, up 47% this year, are likely to rise again. The heavy rain in the Midwest is killing off some of the crop. Flooding will do that. According to Bloomberg, "Rainstorms sweeping the biggest corn states in the U.S. are damaging a crop that’s already failing to keep pace with global demand."
Demand for corn is already at record levels. That is old news. Humans eat it, Feed cattle do the same. And, now some cars eat it in the form of ethanol.
The problem with corn and other commodities prices is that there is absolutely no reason for them to come down. Unlike oil, where there is a chance of increased supply, crop yields hold no such promise.
Unless the agriculture industry is willing to turn to genetically altered seeds, which have the capacity for generating high yields in poor soil with modest rainfall, the opportunity to change the situation simply does not exist.
The seeds from companies like Monsanto (MON) have fallen into a category similar to nuclear energy. They pose a vague danger which is hard to justify. They are easy to reject when there are alternatives.
But, the alternatives are gone, at least for improving global agricultural yield using present technology. Shifting over to new age crops, despite the obscure concerns, is the only option.
Douglas A. McIntyre