Ethanol distillers, who used 41 percent of the U.S. crop last year, boosted production by 4 percent in the week ended Nov. 30, the biggest gain in 14 months and the highest output since the end of June, Energy Department data show.
A reliance on crops to make fuel and expanding economic growth will keep grain inventories tight and contribute to a “new norm” of high food prices over the next two decades, the World Bank said in a Nov. 27 report. Risks to supply are increasing at a time when 12 percent of the world population remains chronically undernourished, the bank said.
World food prices, while down 11 percent from a record in February 2011, were the highest ever on average during the past two years and more than doubled in the past decade, according to the United Nations Food & Agriculture Organization in Rome.
“People and animals continue to eat,” said Sal Gilbertie, who helps manage $69 million of assets as president and chief investment officer of Teucrium Trading LLC in Santa Fe, New Mexico. “Everything in grocery stores is made from corn.”