Higher food prices may persist for several months to come. The Food Price Index has been on the rise for a full year.
Analysts with the UN Food Agency say that it is partly due to tight carry out in the new crop supply numbers. The food and ag organization predicts the global harvest to be more than 2.8 billion tons larger, but consumption is expected to surpass that by 10 million tons.
Our regular contributor, Brian Hoops says that we do have some carry-over to offset the difference, so it is not time to panic yet.
“That’s why we need a big crop is to restore some of these supplies that are getting very tight,” Hoops states. “We’ve been using more corn than what we’ve grown the last couple of years because we just haven’t had that wonderful of a crop and I know a lot of end-users are hoping this year changes that pattern.”
We will find out just how tight USDA predicts this year’s cop to be on Thursday. That’s when new World Supply and Demand Estimates will be released.
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