Corn farmers in much of the United States are taking a hit due to an improvement in the weather conditions in South Africa.
Corn is not as fungible as it used to be. The more generic (yellow) corn has become so inexpensive in world markets of late that many farmers in the U.S. have taken to specialized markets, including white corn, a variety used for corn chips and tortillas.
South Africa is important both to the demand and to the supply of white corn. The product was selling at a premium in 2015-16 due to droughts in that country that reduced the size of the harvests there, and this in turn induced many American farmers to enter this niche market.
The Thing to Know:
The conditions in South Africa have relented, the white corn harvest there has again become abundant. Thus, prices plummeted in 2017 and may continue on their way down well into 2018.