Floods, Corn, and Food Prices

By now, everyone has heard of the floods in Iowa. What the press is now tilting to is the impact on the corn crop and the larger impact this will have on the economy.

So it seems that finally US consumers will feel the effect of Ethanol on food prices just as much as our international consumers are. There will be price increases not only on corn itself, but everything dependent on corn. The obvious list being meats (poultry and cattle are fed with corn), dairy (cattle again), and eggs (chickens chickens chickens). What else is dependent on corn? Our sad excuse for chocolate. High fructose corn syrup is found in all sorts of candies, drinks, sweeteners, what-have-you. Mainly because its a cheap substitute for the already overly priced domestic sugar that we produce. Dr. Pepper fans: get ready to pay higher prices to the good doctor.
Add to this the farmers strike in Argentina* (which surprise surprise, I support. Taxing exports neither helps the domestic, nor the international economy. It only helps government payroll), and the blooming demand for all staple goods from India and China, and it all spells out a pretty bleak picture. There's a phrase that a certain lewd robot makes in "Futurama" that aptly describes the situation. A cookie to anyone who can guess it.

How do we stop the impending food crisis of 2009, when our destroyed crop will start having a real effect on the economy, as opposed to the speculation that's going to be rampant in the next month on food prices?
We can start by repealing the ludicrous sugar tariffs. Cheap sugar imported would be a boon to our neighbors' agricultural economies, as well as allow us to produce GOOD chocolate with REAL sugar (as opposed to second rate corn syrup). It would also take pressure off of the corn ethanol business (if we have to live with this idiocy let's at least spread the love to other crops), since ethanol producers could simply use the cheaper sugar instead of the corn. There are related costs to this, but I've been over that before.

We can also go back to the recent farm bill, and actually use common sense. By that I mean gutting the corn ethanol subsidies to give farmers incentive to sell corn back into the food market. That "cheapening" would be reflected in the market. Farmers would suffer from lower corn prices on the market, yes. But they're less than 2% of our population. Consumers make up 100%. Do the "heartless economic math". Would you prefer millions to suffer hunger in our own country, or thousands of farmers (who coincidentally can still apply for benefits from the government). I understand we've already tolerated millions of other countries populations to suffer due to our prices, but the government only listens to American voters. But after all we do give them "foreign aid" right?**

We could subsidize research into other ethanol production that doesn't require staple crops. Switchgrass, jatropha, heck I've even heard of some one in Mexico farming algae for ethanol.

So. What to do about it individually? I dunno. Eat more pasta and bread (or other wheat based staples). Drink less soda (or no soda preferably). Eat more oatmeal and less cereal. Find a milk substitute. Drink more OJ. As a capitalist, I would just say check the prices and let the market decide. Corn products will go up in price relative to other staples. Just do what you do. Pinch those pennies to get the most you can out of your grocer. It's not the end of the world or civilization as we know it, or even the end of US economic prosperity. Just don't expect things to get better at the supermarket for a while. Although, I'm predicting Wal-Mart and CostCo to do REALLY well in the next year. Don't expect local stores to do well, especially if they rely on corn products of some kind.

*This seems to mostly affect the soy crop, wheat, and beef.
**Let me know if you want to hear about my... less than positive opinion on US foreign aid. Not as great as you'd think. Although I think most of you should already know about that. :P