Americans face sizable increases in their grocery bills this year as a boom in ethanol production diverts more corn from the nation's dinner table to its gas tank. Indeed, their pocketbooks could feel the pinch for years to come.
High corn prices, bad weather and steep energy costs have combined to make food a bigger potential contributor to inflation this year than it has been at least since 2004, when a cutback in dairy production boosted dairy prices and beef prices rose as mad-cow disease disrupted trade.
The Agriculture Department says that retail food prices are likely to climb by 2.5% to 3.5% in 2007, fueled in part by strong demand for corn-derived ethanol. But Michael Swanson, an agricultural economist at Wells Fargo & Co., thinks the rise could be an even sharper 4.5%.
I wrote about this topic here
2 comments:
And no one's even talking about how the disappearing bees are going to affect food prices.
Colony Collapse Disorder scares me more than just about anything else I've heard lately - more than global warming, peak oil, ethanol converting food to fuel - nothing sounds as potentially near-term calamitous as those bees.
And no one's taking about it.
Although, in the short term, we may see big sales at the local market on meat as farmers cull herds in the face of rising feed prices.
I don't have empirical evidence, but I have noticed many sales at the local market on meat at prices 30-50% below market.
Get your freezer going...
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