Moviegoers who live on the east coast and the west coast may soon be forced to pay more at the local multiplex because of terrible flooding in the middle of the country. On Wednesday, U.S. corn futures surged to an all-time high, up more than 4 percent. Ultimately next year’s disappointing, flood-ravaged corn crop will affect the price of movie theatre popcorn.
The situation was already dire. Farmers have a choice when deciding what type of corn to plant, and they have a lot of options. There is Flour Corn, Sweet Corn, generally the stuff you see in the produce department at your local grocery store, High-Oil Corn, which becomes livestock feed, Blue Corn, used for meal and tortilla chips, and Popcorn. There is also the variety of corn that is used to make ethanol.
The 2005 US Energy Bill mandated that 4 billion gallons of ethanol be produced in 2006 and 4.7 billion gallons be generated in 2007. That number is set to go up every year to 7.5 billion gallons in 2012. To accomplish these mandates, the Federal Government is paying subsidies to American farmers to encourage them to grow the ethanol-producing strain of corn.
The end result is that American corn farmers are growing less and less Popcorn. In order to keep farmers from switching to the more lucrative ethanol corn, popcorn and food manufacturers have been forced to increase their bids. That has resulted in a 25 cent per bag increase in concession stand popcorn prices at AMC Theatres, and similar hikes have taken place at many US theatres.
With 31 percent of the total 2008 US corn crop expected to be devoted to ethanol, the price of popcorn would already be increasing again next year. Now, the disastrous flooding in the Midwest has apparently destroyed a significant portion of next year’s crop. Ethanol production and heavy rains in America’s Corn Belt have created a ‘Perfect Storm’ that could result in $7+ for a large popcorn sometime next year.