Black Horse: U.S. Corn Reserves Plummet

The line between feast and famine is the thinnest it’s been since 1996. U.S. corn reserves are plummeting. The world could be one bad U.S. harvest away from chaos.

The U.S. Department of Agriculture reported on Wednesday that by the end of the year, America will have only 675 million bushels of corn—about 5 percent of the year’s corn consumption. It is the lowest level in a decade and a half, and underscores the fundamental reason corn and other grains are soaring in price. According to the Department of Agriculture, reserves of wheat and soybeans are also at historical lows.

A major reason for the corn stock decline is the ethanol industry. The Associated Press reports that the industry consumed 13 billion bushels of corn last year—an 8.4 percent increase over the previous year.

If the Associated Press’s numbers are correct, another 8 percent increase next year would effectively consume all existing U.S. corn reserves.

The low food storage levels leave little margin for error if there is a bad crop this year, says Telvent analyst John Sanow. “I think we have a chance to test the all-time high” price. If U.S. corn reserves approach zero, that will be the understatement of the year.

Corn is used in an amazing array of foodstuffs. Besides being eaten straight off the cob, corn is used to manufacture corn syrup, an almost universally used sweetener. Corn is also used in manufacturing everything from cardboard to biodegradable containers. It is also used for animal feed. In addition, corn http://www.thetrumpet.com/?q=7960.6578.0.0 is used in the manufacture of drinking alcohol along with the ethanol used for vehicle fuel.

Corn is an essential commodity in increasingly short supply.

But even if corn production is ramped up, it won’t solve the global food problem. Most useful agricultural land is already in production. If farmers switch to growing corn—they have to do it by not growing something else (like wheat or soybeans).

Making the global food problem all the more precarious are reports out of china indicating the country’s wheat-growing regions are suffering drought. China is considered borderline self-sufficient—but a severe drought might force it to try to purchase wheat on the open market, causing shortages elsewhere.

In America, higher food prices are already making it onto store shelves. Some producers are instead deflating food bulk—keeping packaging the same size, but putting in less food.

But higher food prices have already begun impacting other countries in a much more dramatic way. In countries like Egypt, where people spend a much higher proportion of their income on food, rising prices have sparked mass riots.

As the world’s largest wheat, corn and soybean producer, America has a huge impact on global food prices. With global food stores at such low levels, a bad harvest in America could ignite food riots in more places than just Egypt and Tunisia. Bible prophecy says that the black horse is gallopingnear.

(Source: http://www.thetrumpet.com/?q=7960.6578.0.0)