TelecomZombie
06-13-2008, 12:41 AM
Trouble in nearby U.S. corn country is fuelling concern that the world food crisis could deepen and eventually find its way to Ontario grocery store shelves.
Torrential rains across the American Midwest in the past few days have dashed hopes that bumper crops might allow inventories to rebound after sagging to their lowest level in decades.
"They are flooded out," Peter Johnson, an Ontario Agriculture Ministry crop specialist, said yesterday.
Corn prices yesterday continued to surge to record highs, hitting $6.74 a bushel for July delivery on the Chicago Board of Trade after the U.S. government predicted yields will fall by 10 per cent.
Soybeans also are trading at close to record territory.
Ontario's corn crop, worth about $500 million most years, is facing its own struggles, but is doing much better than the crop in key U.S. growing areas, Johnson said.
"We are in reasonable shape. We are not too worried yet."
The main Ontario challenge is weed control because winds and rain have made it difficult to apply herbicides, he said.
The jump in prices is proving a mixed blessing across Ontario's farm belt, bringing welcome financial relief to grain producers who have suffered a decade of disastrously low prices.
But hog and beef producers are being hammered by the higher costs of feeding their animals, forcing some out of the business.
Eventually the higher costs will be passed on to consumers when meat supplies dwindle, said Bill Wymenga, a director of the Ontario Pork Producers Marketing Board from the Ridgetown area.
"It may take a year to get through the system, but that will be the result."
Though higher food prices have already hit other countries, Canada's food inflation has been relatively tame over the past year, thanks partly to the rising Canadian dollar.
Lower prices for imported fruits have offset a 10 per cent jump in wheat-based products.
A recent report by the George Morris Centre, an agricultural think-tank, said rising food prices are squeezing the grocery store sector, but stores are unable to pass along all of the increases.
That's because grocery chains are fighting for market share against other general merchandisers such as Wal-Mart, and price is a major weapon in the battle, the George Morris study said.
And not all of increased grocery prices can be blamed on a jump in crop prices, said Ken McEwan, an agricultural economist at the University of Guelph Ridgetown campus.
In a 681-gram box of Corn Flakes in 2005, the farmer received seven cents. Now that corn has gone to $6 a bushel from $3, the farmer's share will be 14 cents, he said.
"The more important parts will be additional costs of transportation, packaging, handling, distribution and warehousing because of rising energy prices," McEwan said.
http://lfpress.ca/newsstand/News/Local/2008/06/11/5836981-sun.html
Torrential rains across the American Midwest in the past few days have dashed hopes that bumper crops might allow inventories to rebound after sagging to their lowest level in decades.
"They are flooded out," Peter Johnson, an Ontario Agriculture Ministry crop specialist, said yesterday.
Corn prices yesterday continued to surge to record highs, hitting $6.74 a bushel for July delivery on the Chicago Board of Trade after the U.S. government predicted yields will fall by 10 per cent.
Soybeans also are trading at close to record territory.
Ontario's corn crop, worth about $500 million most years, is facing its own struggles, but is doing much better than the crop in key U.S. growing areas, Johnson said.
"We are in reasonable shape. We are not too worried yet."
The main Ontario challenge is weed control because winds and rain have made it difficult to apply herbicides, he said.
The jump in prices is proving a mixed blessing across Ontario's farm belt, bringing welcome financial relief to grain producers who have suffered a decade of disastrously low prices.
But hog and beef producers are being hammered by the higher costs of feeding their animals, forcing some out of the business.
Eventually the higher costs will be passed on to consumers when meat supplies dwindle, said Bill Wymenga, a director of the Ontario Pork Producers Marketing Board from the Ridgetown area.
"It may take a year to get through the system, but that will be the result."
Though higher food prices have already hit other countries, Canada's food inflation has been relatively tame over the past year, thanks partly to the rising Canadian dollar.
Lower prices for imported fruits have offset a 10 per cent jump in wheat-based products.
A recent report by the George Morris Centre, an agricultural think-tank, said rising food prices are squeezing the grocery store sector, but stores are unable to pass along all of the increases.
That's because grocery chains are fighting for market share against other general merchandisers such as Wal-Mart, and price is a major weapon in the battle, the George Morris study said.
And not all of increased grocery prices can be blamed on a jump in crop prices, said Ken McEwan, an agricultural economist at the University of Guelph Ridgetown campus.
In a 681-gram box of Corn Flakes in 2005, the farmer received seven cents. Now that corn has gone to $6 a bushel from $3, the farmer's share will be 14 cents, he said.
"The more important parts will be additional costs of transportation, packaging, handling, distribution and warehousing because of rising energy prices," McEwan said.
http://lfpress.ca/newsstand/News/Local/2008/06/11/5836981-sun.html