Floods damage corn crop, HFCS prices likely to rise

Posted June 30, 2008 11:40 am by BevNET.com Staff

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.