Market Speculators, Oil Drive High Food Prices
by Mike Bryan (Ethanol Producer Magazine) The U.S. drought, disastrous as it is, does not signal Armageddon for food prices, biofuels and the poor. First, one needs to understand that the main drivers behind rising corn prices, even in today’s drought conditions, are the market speculators and hedge fund managers. Over the past 10 years, they have done more to spike the price of corn than any drought or natural plague and made millions of dollars in the process. Second, the price of oil is right behind these speculators in terms of causing a rise in food prices. The cost of petroleum-based fertilizer, planting, harvesting, transportation and processing are all adversely affected by the price of oil.
…A corn crop of 10.8 billion bushels, while down roughly 13 percent, is an enormous crop, and one that will completely satisfy the domestic and export needs of America. It’s the sixth largest corn crop in U.S. history. Market speculators send the message that the sky is falling and make millions terrorizing people. READ MORE