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U.S. Corn Becomes World’s Most Expensive

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    Trean Senior V.P. Scott Shellady on the factors behind the U.S.’s rising corn prices.

  • Duration 4:16
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Corn prices have heard about this and we -- bragging rights the world's most expensive court.

And as if food and gas prices aren't high enough all -- companies right here in the US are buying more -- from other countries because it's cheaper.

You blame the drop you can also blame the ethanol mandate and Scott -- -- Senior vice president with tree aunt and great to see -- Scott thanks for coming on the show.

A problem while 77% of Americans saw their tax bill go up with this fiscal -- deal people be happening here that ethanol makers were able to keep their tax breaks.

They extended the and one dollar and one cent per gallon tax credit for ethanol makers they also allowed them to continue to depreciate their equipment.

What do you think about that.

Well you know it's been about ten or even twelve years -- -- the government's been about -- those -- lawmakers and it's not just Obama bush was there as well -- but lately the administration is much greener than it was with bush and I think that this is -- -- new Sandra but you know.

This is the government's answer to giving ourselves off of foreign oil -- The Middle East but at the end of the day.

It's more corrosive it takes more energy to put out of the ground and transport it it's just not a viable solution but it's a short term solution that they're gonna stick with.

For the short term.

I remember what I was a kid I used to see the archer Daniels midlands commercials where they would say you know when they were putting corn and cheered -- your gas tank and it's so clean was always on the Sunday morning political shows.

But you look at the market distortions that have come into play as a result of it for example.

I'm in 2010 we didn't import any corn from Brazil all the sudden we are on pace to exceed ten million dollars in imports imports over all of corn.

Went up 55%.

Last year overall all the corn that we bring into this country so why are we importing corn.

When we have a lot of -- in the country right now what's the what's the reason -- firmer.

Well you know the a lot of the stuff that's -- hitting the books certainly is coming and imports is was booked a while back to you know.

What we were really out of whack and that was because we had this drought and -- by the way we still have a -- and it's worse than it was a while back.

We haven't got any the water that we needed or they mean it -- so we're gonna have another tough time next year mark my words.

We need more than time it rains you get rid of this problem but also.

You know we've had the Fed c'mon let's say that the thing about unwinding QE and that's cause a dollar to get stronger that's helped bring things back -- alignment when these -- these deals were being booked.

The dollar was really cheap because -- -- a lot of -- fed money in their number one and number two is we had a real big drought here so there's not just one thing -- market more expensive than it normally is but yes you're right 13 of our balance sheet of corn.

Goes up and off.

-- I mean we're saying is when I go to the start -- -- court or by going by serial or anything else that corn is in.

There is a lot of competition for that corn now as a result I mean there's the drought out there killing part of of the crop and then there's also this fight to use it for fuel instead of food.

Maybe now is not the time to be -- -- to be turning precious corn into fuel.

I agree with you and I'm not a big fan about the -- on all and we've got a family farm and if you took away that ethanol mandate that's the biggest single thing -- -- corn prices higher may -- than they should be.

The core price were absolutely -- of you can imagine adding back in 13.

Of the annual -- -- that corn balance sheet.

That would be you know that would -- those prices to the floor but that keeps also the midwest farmer -- remember those votes as well -- -- to -- first on the ballot.

Number two is that.

Yes you've got more competition globally and you've you've seen already a higher price rise most core prices and like I said -- all the viewers have to be especially where.

We're not giving them the ground water that we need to have a successful your next year and if you remember a most of these -- -- the last hundred years.

Lasted at least two years in the dust bowl was for yeah I'm not saying it's going to be a total disaster we've got some things are really worry about here and it could be the fact that we even import more corn next year.

And you have to wait what's going on here because you mention of corn prices collapsed obviously that would be very got for corn farmers and that's not what we're rooting for.

But the average person sees the price of chicken -- everything that feeds on corn go up you see the price of the things that you -- in the supermarket that contain corn go up.

You see the price of gasoline go up because ethanol is expensive so -- you're paying for it.

All over the place as a result of this Scott thanks for breaking on the issue for us we appreciate it.

All right if it's time now.

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