Food prices to remain high on growing demand
An estimated 846 million bushels of corn will be on hand at the end of summer 2012, a surplus that satisfies demand for less than 25 days and fails to meet the 30-day supply considered to be a healthy stock, according to the U.S. Department of Agriculture.
A low supply in 2011 contributed to high food prices, which rose between 3.25 percent and 3.75 percent, said the USDA. Food inflation is expected to slow in 2012, dropping to between 2.5 percent and 3.5 percent, but corn is likely to remain above $6 a bushel for all of 2012, which will keep food prices high. Growing demand from livestock producers in China and the U.S. ethanol industry will counter any surpluses, according to the USDA.