Apparently we may be heading for a corn crisis. Yes, you heard right, corn. The U.S. is becoming very dependant on corn and a drought in the Midwest could not only increase the cost of food but also for gasoline. Corn is fed to dairy cows to make milk and to hens that lay eggs. It also fattens cattle, hogs and chickens before they are slaughtered. Corn also makes soda sweet. Corn is the building block of ethanol which is a major component of auto fuel.
Did you ever think that corn could be the primary reason that you might have to pay $5 at the pump in the future? "We are replacing price volatility from the Middle East with Midwestern weather price volatility," said Michael Swanson, a Wells Fargo & Co. vice president and agricultural economist. Some say that this can happen as soon as this summer. The risk of a drought is very high and since 1971 there have been 4 other weather disasters that have wiped out 21% to 29% of the corn crop at a time. In the past, these disasters would only affect the price of food but the next time will be the first when gas prices are also affected.
Currently ethanol makes up about 6% of the nation’s gas supply. That number is expected to rise to 10% over the next 5 years. Farmers are growing more corn because it has become more important and thus they are making more money. Nevertheless, if disaster strikes the increase in supply from the growing trend of corn as a rising cash crop will not be enough to save you from spending more money at the pump.
To me this is an eye opener indeed. Everyone worries so much about our dependence on oil and the problems that has created in the Middle East. Did anyone ever stop to think that reducing that dependence could create other problems that may be just as serious or costly? Sometimes we just don’t stop to think about the consequences of our decisions as long as it fixes the problem we are currently faced with. There may be a time in the future where corn or other types of naturally grown food becomes a scarce commodity such as oil and the balance of power shifts because a country or region controls the supply to the world. The threat we face with global warming may very well make that a reality.
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Submitted by brian on Mon, 03/31/2008 - 21:54.