Harvest is beginning, and with it we’ll have a first real-world look at what corn yields will be for 2012. The U.S. Department of Agriculture has provided its own prediction of a national average at 123.4 bushels of corn per acre (as of their Aug 10, 2012 report). There are many consequences to that yield, not the least of which is changing corn prices. But what impact will that have at the grocery store? The immediate impacts will be felt in the livestock sector as herds are liquated. As time rolls on, however, other prices will be impacted. USDA actually anticipates about a 3-4% increase in the coming calendar year.
It’s interesting to see that the meat products with the highest corn value are in the poultry section (including eggs.) The biggest takeaway that you’ll have after studying this document, no doubt, will be that the largest portions of the cost of food are not directly related to the commodities themselves, but rather processing, energy, and marketing.