What to do when the (corn) chips are down
In the meantime, it's not like corn was a really underused crop. Corn is not only the basis of most animal feed, but it also goes into a startling array of foods, often in the shape of its evil twin, high fructose corn syrup. HFCS, the Darth Vader of food additives, is in most sodas, most breads, almost all processed snack foods, and even in pickles. I kid you not; Claussen recently started putting it in with their Kosher dills. Bastards.
And, if this wasn't enough, there are always those freaks, myself and Mexico included, who consume corn in a relatively natural form. I enjoy it off the cob, in cornbread, or in chips, while Mexico seems to prefer tostadas, tamales, and tortillas. Unfortunately, back in the 1990's, NAFTA undermined Mexico's corn industry with a flood of cheap, subsidized American corn. Last year, amid the first real push for ethanol, corn prices went through the roof and Mexico found itself barely able to afford its most important staple.
We're about to feel the same pain. Floods in the midwest have undermined the corn crop just as we need it the most, leading to insane increases in corn futures. Right now, corn futures for May 2009 are standing at over $8 a bushel, a four-fold jump from 2006's prices. The short-term effect is that corn will probably not be used to produce ethanol.
This, actually, isn't really a bad thing; as numerous experts have noted, corn is not even remotely the best material for producing a petroleum substitute. On the one hand, there's trash-based biofuels, which potentially offer massive landfill reduction and cheap fuel. On the other hand, there's cellulosic ethanol, which promises to be easier on the environment and less expensive than corn-based ethanol. Both options are clearly preferable to using our corn crop to fill our gas tanks.
On the bright side, if you've got a few dollars to invest, you could probably do a lot worse than corn futures. As people start to realize how widespread the effects of this years corn crisis are, prices will probably continue to rise. Meanwhile, this disaster will, most likely, have a pretty good effect on our national health: the big selling point of HFCS is that it is much cheaper than sugar. As the price of corn rises, however, that may no longer be true, so we might start to see real growth in "organic" or "HFCS-free" foodstuffs. Of course, the more prominent the "organic" label, the higher the price!
In the meantime, if you're a corn fiend, this might be a good time to stock up on the Cap'n Crunch, Corn Bugles, Tostitos, and all the other munchies that are corn-based. Barring a nice heat spell, corn is poised to become a luxury. Helloooooo soybeans!
Bruce Watson is a freelance writer, blogger, and all-around cheapskate. Right now, he's wondering how soy Doritos are going to taste.