Technology and the Declining Price of Grain

Once again, reports out of Iowa are that corn prices continue to decline.  Bad news for the farmer, but good news, I guess, for those of us in the eating-community. Ironically, given the overabundance of corn, farmers are hoping to see drought-like conditions that would help to firm per-bushel prices.  They may get their perverse wish, as climatologists are expecting La Nina-type weather conditions, next summer, meaning less rain.  This is interesting though (Farm News Iowa):

Wisner said even with a drought, current varieties of corn that are drought tolerant make for near normal yield prospects. ‘‘It will take several years to see tightening of the corn market,’’ he said. ‘‘Once the 75 to 100 new ethanol plants that are in the development or construction stages are built in the U.S., the corn market will show vast improvement. Then the problem will be we will have more ethanol than demand for the product.’’

This is nice, a very good example of technology (drought-resistant strains) helping to reduce costs for the consumer and uncertainty for the farmer, even if, in the short-term its not ideal.  The ethanol issue is also one to watch.  What's the point of subsidizing an alternative form of energy if it will only make our food prices go up?

(Note: This article was found not because I regularly read Farm News Iowa, but because I subscribe to the Google News feed for the term "Grain Prices".  It's a good way to follow any area of interest to you.)