The severe rain and floods that have been typical of this spring’s weather have limited grain supplies in the United States. Since April, intense rain and heavy flooding have plagued the Corn Belt, reaching as far as the Dakotas and saturating prime farmland throughout the Midwest. In addition to rain, intense flooding, primarily along the Mississippi River, has destroyed tens of thousands of acres of valuable farmland. The extreme weather has had a major impact on production, depressing the grain supply and preventing the planting and harvesting of crops throughout the region.

Earlier this week, the U.S. Department of Agriculture released its outlook for the 2011-2012 crop harvesting season and noted that corn production would likely be significantly down from their previous predictions in May. With American production depressed, international demand will need to be satisfied by increased foreign production. However, with global corn production remaining the same and with Chinese production largely being consumed locally, it seems unlikely that supplies will be replenished.

While supplies will most likely be low, demand will most likely remain high. The increased demand for ethanol production removes significant amounts of corn from the food supply. That combined with the use of corn for livestock feed will most likely drive corn and food prices up.

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Written by: Justin Ellison / Farm Plus Staff Writer