SHOP
Log in
Don't have an account?
Sign Up Here →
Forgot Password?

Corn Prices Jump 50% Amid Historic Drought

July 19, 2012

    Lately, the media has been filled with stories about how America’s Corn Belt has been experiencing the worst drought in 50 years with no end in sight. The severe dry heat across the Midwest has destroyed much of the nation’s corn and soy crops. The summer harvesting season, which just two months ago was expected to produce a “bumper crop”, has now been drastically downgraded by the USDA. According to some estimates, 78 percent of the US corn-growing regions are in drought.

    The anticipated cuts in crop production have already caused corn prices to soar. And because corn is used in 75% of supermarket products, you can expect to see your grocery bill continue to rise. For those who already on a tight budget or a fixed income, this is unwelcome news.

    However, it is unlikely that the price increase will be dramatic. According to a 2008 USDA report, less than 16 cents of every dollar spent by shoppers went to farms. The remaining 84 cents went to labor, packaging, transportation, advertising, etc.

    For those who follow our own P.A.C.E. investment portfolio, you may know that we bought a corn ETF back in June and have enjoyed a very nice return over the last several weeks.

    For current investors, be careful not to chase corn at these levels. At the first drop of rain, I would expect corn prices to fall quickly. However, who knows when that will occur?

    Are you new to Jerry Robinson’s P.A.C.E. Investing Philosophy? Learn more here.

    Subscribe
    Notify of
    guest
    0 Comments
    Inline Feedbacks
    View all comments

    Please help us spread the word about FollowtheMoney.com on Facebook, Twitter,
    and any other social media outlets.

    Silver & Gold

    Call 800-247-2812 now for the best prices on gold and silver coins and receive Free Shipping and Insurance when you mention Follow the Money.

    Weekly Newsletter

    Stay in the loop!
    Sign up today to receive our
    weekly e-newsletter.