Before understanding how and when the protein bubble will burst, we have to understand how it was formed in the first place. Let’s review it briefly before I explain why I think prices are heading a lot lower.
Over the last 10 years, protein prices have surged, followed the price of corn as it marched to all time record highs. I predicted this outcome in my May 2012 paper, “Popping the Corn Bubble.” I blamed the corn ethanol mandate as established in the Energy Policy Act of 2005 and the Energy Independence and Security Act of 2007 for setting off a general surge in agriculture commodity prices that would drag soybeans, wheat, hay and cotton, as well as protein prices with it.
Corn supply is cut by 40%
As you look closely at the chart below, understand that corn prices had been stable for the last 50 years at about $2.30 per bushel.
To read the rest of the story, please go to: Forbes
