Monday AM January 31st, 2011

U.S. corn, wheat and soybean prices soared by as much as 50% last year, hitting their highest levels since mid-2008. A recent Reuters poll says they’ll remain high through 2011. George Caldwell of the Texas Farm Bureau says that’s a welcome change for grain producers.

“We’ve struggled with tight prices, with expenses and so forth for several years, and so this is an excellent opportunity.”

The Reuters poll says low grain inventories mean an end to cheap food prices. Caldwell says other factors will play a bigger role in driving up grocery bills.

“Right now, a huge part of what drives the cost of food in the grocery store is fuel prices. Fuel prices affect our energy that we use for utilities to run the store, the fuel prices to transport the goods. Everything that we do in our society, fuel cost is one of the largest things that we face.”

Drought in Russia, flooding in Australia and surging demand for corn from U.S. ethanol producers have combined to deplete global grain stocks.