Higher food prices ahead as corn reserves sink

Americans should brace for higher food prices this year now that demand for corn has pushed U.S. supplies to their lowest point in 15 years.

Higher projected orders from the ethanol industry sent corn futures soaring today, as corn supplies became the latest commodity to plummet. Low levels of wheat, coffee, soybeans and other food staples have already sent prices surging on the global market.

As those reserves decline, U.S. food companies are warning of retail price increases.

The ethanol industry's projected corn orders this year have risen 8 percent, to 13 billion bushels, after record-high production in December and January, the Agriculture Department said today.

That means the United States will have about 675 million bushels of corn left over at the end of year. That's roughly 5 percent of all corn that will be consumed, the lowest surplus level since 1996.

The USDA report measures global supply and demand for grains, oilseeds and other crops. The department said its projections for wheat and soybean reserves remained unchanged at historically low levels.

The price of corn affects most food products in supermarkets. It's used to feed the cattle, hogs and chickens that fill the meat aisle. It is the main ingredient in Cap'n Crunch and Doritos. Turned into corn syrup, it sweetens most soft drinks.