Floods damage corn crop, HFCS prices likely to rise

Beverage companies that use high-fructose corn syrup may suffer pinched margins in the near future, as Midwestern floods washed away some of this year’s corn crop.

The Associated Press reported Monday that farmers will likely harvest nine percent less corn this year than last year due, in part, to crops killed by floodwaters.

Farmers had already planted less corn for the 2008 growing season than they had for 2007 – about 7 percent less – and the waters that broke through levies and out of rivers in Iowa and other Midwestern states will exacerbate that shortfall.

Corn prices have already climbed due to increased demand stemming from corn-based ethanol and speculation from commodities investors fleeing Wall Street volatility. High-fructose corn syrup prices have also climbed and, at the same time, the public has soured on the sweetener as groups have suggested it can be tied to America’s rising obesity rates.

Source: BevNET.com Staff