On Friday, the US Department of Agriculture said that US farmers plan to increase their corn-growing by the greatest amount seen in the last 100 years! Why? Currently a high increase in demand for ethanol exists, which can be produced from corn. Effected sectors of the increase corn production include soybean and cotton. For all the corn-lovers out there, this could be great for your wallet. The greater the availability of corn, we know from econ that the cheaper the prices should be. This comes at a cost though.
If soybeans and cotton are affected, this naturally would mean increased prices to buy these goods. Should we expect to pay more for soybeans (I don’t, I don’t consume soybeans, but some other people must…) and pay more cotton, something that the majority of Americans do use? If so, will we see a large jump in prices for cotton?