Corn to Blame for Rising Food Prices
An unlikely culprit -- corn -- is to blame for higher prices at the supermarket.
May 17, 2007 — -- If it seems like household staples are more expensive this year, that's probably because they are.
In nearly every aisle of the grocery store, the government says food prices are up close to 4 percent over this time last year.
Victoria Ostrowski, a New York-area mom, has watched the price of milk jump 20 cents in the last six months.
"Literally, I go from store to store to find the best prices, in terms of milk, because I buy so much," she said.
The price of milk is up at least 3 percent across the nation, and has risen a whopping 30 percent in California, where food prices are the highest in the nation. Ground beef prices are also up close to 3 percent.
"It's going up and up and up," said Hollywood, Calif., shopper Rosanna Kazangyan.
Economists say consumers shouldn't expect price increases to stop. The government is warning of the highest rate of food inflation since 1990.
The main culprit is corn. It's used in so many grocery store foods and is also fed to dairy cows, hens and cattle. In addition, corn is now used to make billions of gallons of ethanol a year. The growing demand for the corn crop is sending a ripple effect into every aisle of the supermarket.
"It wasn't really expected a couple of years ago [that] we would see such a boon in the price of ethanol or the price of corn," said Geoff Benson, associate professor of agriculture economics at North Carolina State University.
Many farmers have realized how valuable corn has become and turned other fields formerly devoted to wheat, soy and other foods into cornfields. But some say that will only drive up food prices more, as the demand for wheat and other key ingredients rise too.
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