NumBytes 30: Corn Dole

In ancient Rome, the 'Corn Dole' was the Empire's equivalent of welfare for the masses -- subsidized grain to make the daily bread. When the corn ships of Egypt failed to arrive, or supplies ran low, Emperors trembled, because the populace without their corn made those modern Greek riots seem like a garden party.

Fast forward to today and the Chinese. When corn hit record prices of about $8 per bushel back in June 2011, farmers planted corn like crazy and prices dropped down to $6 per bushel. China promptly bought up 540,000 metric tons of US corn futures, the largest single purchase in recent memory, which popped the price back up to $7 a bushel.

Now, the US Department of Agriculture forecasts that China will purchase 2 million metric tons of US corn in the next year. That's a kernal on an ear considering ethanol production requires north of 5 billion bushels and feed is another 5 billion bushels. However, with ethanol production slated to expand, government ethanol subsidies remaining in place, and the Chinese buying up supplies, what will happen to food prices? It might be a heckuva cleanup in aisle 4.