American grain marketing expert and forecaster Scott Stewart offered a startling prediction last week during a speech to the Chicken Farmers of Canada annual meeting.
Some year in the not-too-distant future, American corn prices will soar as high as $8 or $10 per bushel.
“I think you guys are in deep trouble,” he told the roomful of Canadian chicken farmers who buy feed grain for their flocks.
Stewart’s prediction was based on a simple observation: U.S. feed grain demand has increased in recent years and carry-over stocks are low, even in a high production year like 1996.
Read Also
Agriculture ministers agree to AgriStability changes
federal government proposed several months ago to increase the compensation rate from 80 to 90 per cent and double the maximum payment from $3 million to $6 million
“If we ever have a drought or a bad crop year, we’ll see $6, $8 or even $10 corn,” he said March 25.
Last year’s high of $5.50 corn will easily be surpassed.
“I think we could be looking at sky-high prices if anything goes wrong with the market,” said Stewart.
Demand exceeds supply
He said North American production simply has not been keeping up with growing demand. Because of that, the self-proclaimed free-market, anti-government advocate said he favors a return by the American government to the grain reserve business.
He said the government has gotten out of holding grain reserves and he does not think U.S. politicians are anxious to return to that business.
Stewart said he does not favor use of a grain reserve to manipulate market prices. However, he said he would feel safer if a couple of billion bushels of corn sat in a reserve.
“The government owes us security,” he said. “The only thing that keeps us secure is food.”
Stewart said he does not expect a reserve to be created soon, however.
“Before the government does that, we’ll have to run out, have a drought, run out of grain and have corn go to $15 before the government does something.”
