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The effects of high interest rates are as close to you as your morning cornflakes. Food prices could rise sharply late this year. High interest rates mean major buyers aren't borrowing to buy the corn, wheat, and soybeans they will need over the next six months. With demand sluggish, commodity prices are so low that farmers aren't selling. This situation is worsened by the strength of the US dollar, adding to the cost of US grain for foreign buyers.

A possible result: a surge of competitive buying in late 1981-early 1982 that will clog domestic transport and export facilities and drive up food prices at home and broad.

Buyers hope farmers will give out first and sell more grain at giveaway prices to avoid operating their farms on money borrowed at 20 percent.m

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