Places and things use corn
Corn has a wide variety of uses that make it an integral part of both the domestic and global economies. As an agricultural commodity, corn is used to feed people around the world. As an alternative energy source, corn is fermented and distilled into ethanol as a substitute for traditional gasoline. The majority of corn usage can be broken down into three main categories: livestock feed, human food consumption, and bio-fuels.
Corn is an example of an agricultural commodity classified as a cereal grain. Essentially cereal grains are produced in order to be consumed for nutritional needs. Livestock feed makes up a large percentage of demand for cereal grains. Feed and residual uses account for the largest percentage of demand for domestic corn. 46% of the 2007/08 U.S. crop was drawn upon for feed and residual uses. This portion of demand is important to understand because of changing world trends. In the last 45 years, total meat supply quadrupled (United Nations Food and Agricultural Organization). During that same period, consumption per capita has more than doubled. With that in mind, it takes 16 pounds of grain to produce one pound of beef and 6 pound of grain to produce one pound of pork. Growing meat demand means growing demand for feed. Corn, being an agricultural commodity, will be used to feed the world’s growing demand for meat.
Humans consume corn for nutritional value in a number of different ways. High fructose corn syrup is used in products like soda and salad dressing. Glucose (not used in the production of high fructose corn syrup) and dextrose are simple sugars used to produce sweeteners. Corn starch is used to make cereals, breads, chips and tortillas. Corn is also eaten in its natural form and can be found in soups, canned goods and frozen goods. Considering all of its nutritional uses, high fructose corn syrup accounts for over 50% of corn’s demand for food uses (USDA ERS).
Corn is an agricultural commodity, but not all consumption can be attributed to traditional demand consumption by humans and livestock for nutritional purposes. Issues regarding clean renewable energy and dependency upon foreign energy supplies are economic and environmental concerns that are now coinciding with a growing awareness. Regardless of your stance on ethanol, it has become a significant percentage of corn demand. U.S. corn used in the production of ethanol reached 24.7% of the 2007/2008 harvest (USDA ERS). With nearly 1 in every 4 bushels of domestically grown corn going into the production of ethanol, understanding the issues affecting bio-fuel demand means a better comprehension of a significant driving factor of corn prices.
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