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Gasoline prices in the U.S. have been rising lately, but for California the increase has been steeper. According to data of gas prices per county compiled by GasBuddy.com, prices in California are the highest in the U.S. California’s gas prices skyrocketed over the weekend due to supply disruption caused by a power outage to an Exxon Mobil plant in that state. As a result, regular gasoline reached an average record price of $4.614 per gallon.
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The average weekly income in the US has been going up in the last fifty years, at least in nominal terms, as seen in the first graph. The price of a gallon of gas has been trending up as well, with spikes beginning in 2002 up to 2008, when gas prices decreased dramatically as a consequence of the economic recession. In 2010 gas prices increased again and continue rising to this day, as seen in the second graph. It is worth noting that the number of gallons of gas that can be purchased by a person earning an average income has been decreasing steadily since 1998.
According to the Earth Policy Institute, drought conditions have generated bleak corn yield estimates for the remainder of 2012. Corn yields for September 2012 are estimated at 123 bushels per acre, which would make it the lowest yield since 1995. Compare this yield to the highest ever value of 165 bushels per acre, which was last reached in 2009.
As a consequence, the price of corn has increased significantly. It reached a record high of $8 per bushel in the corn futures market back in July, and has fluctuated around that price since then. Another consequence is the expected fall in global grain supplies. Supplies are expected to fall to 432 million tons, or 69 days of global consumption.
According to a new study released by researchers at the New England Complex Systems Institute in Cambridge, high food prices play a direct role in the rise of political instability in North Africa and the Middle East. As shown in the graph above, when the UN food price index rises above a certain level, the number of riots increases around the world. The study mentions two factors that are leading to higher food prices: investor speculation in the commodities market, and the use of corn for the production of ethanol in the US.
The worst drought in fifty years has caused a decline in the stockpiles of crops such as corn, soybeans, rice and wheat, with the subsequent all-time increase in the prices of corn and soybeans. Good news for commodities investors.
The drought has also affected fuel and power production which, in turn, have a negative effect on food prices. Read more…
We just launched the beta version of our new commodity news section. We hope you find it useful.
We are now tracking the historical prices of four additional commodities:
We are currently processing the results of our commodities trade survey. We figured that a good way to display the results would be through a map visualization showing trade flows to and from each country represented in the survey. The image below shows one of the visualizations (click on it for a larger version).
The map shows trade flows from Australia. Lighter lines represent trade flows with a small number of deals. Darker lines are used for trade flows with larger number of deals. Stay tuned for more results.
Update (August 15th, 2011): You can now play with our trade flow visualizations.
Historical commodity prices updated with Dec 2010 data. Salmon & copra jumped over 13% in 1 month