With commodity prices in a trough since 2013, U.S. farmers have tried to bolster their income by diversifying their crops, such as planting white corn, the variety used in corn chips and tortillas. That decision is now coming back to bite them because overproduction is driving down the price of white corn to nearly the same price as yellow corn fed to livestock, says Reuters.
Ordinarily, white corn sells for as much as $1 a bushel more than yellow corn, but the premium is now as low as 5 cents. “Too many farmers planted white corn in states such as Illinois, Kentucky, and Nebraska,” said Reuters. Growers “may be forced to sell their crops at a loss to makers of ethanol or animal feed because of a glut of what is usually a human food-grade product.”
White corn is a mere sliver, roughly 1 percent, of the U.S. corn crop. It is grown in only a few states and is destined for a small market of food companies. As a result, prices for white corn are more volatile than they are for widely grown yellow corn, a DowDuPont official told Reuters. Prices for white corn surged in 2015 and 2016 because of drought in southern Africa. South Africa recovered with a record corn crop, so “there is more global supply than demand,” said the wire service.