In this weekly Commodities Watch column, John T. Barone, president and commodities analyst for Market Vision Inc., offers a snapshot of the state of commodities for restaurants.
Food commodities are all about corn, and right now corn is all about weather. Hot, dry conditions across the Corn Belt are stressing the young crop and potentially cutting yield. On Friday, satellite imagery company Lanworth issued their crop forecast, and just like last year, Lanworth’s estimate for 2012 U.S. corn at 13.65 billion bushels is well below the USDA forecast of 14.79 billion.
Historically, warm weather this year let farmers plant earlier than usual. Hopes were to have a well-developed crop before the summer heat arrived and to avoid excessive heat during pollination. Dry weather early in the season can be helpful, forcing plants to develop deep root structure. But too little moisture will stunt growth and eventually wilt crops. It’s still way too early for disaster, but it may be a good time to start worrying. Corn futures jumped from $5.51 to $5.98 last week.
Contact John T. Barone at email@example.com.