Friday, June 22, 2007

Food Prices Soar Thanks To "Big Corn"


From Thursday's IBD:

Rising demand for greener energy began competing in earnest with the food supply in the last year or so. That sent per-bushel corn prices soaring to around $4 a bushel from a historical average closer to $2.

Those higher costs also trickled down to beef, milk, fruit and a host of other staples. May food prices rose 4.7% from a year earlier, according to the latest consumer price index. The cost of eating out rose only slightly less.

The Agriculture Department said consumer food prices will rise 3% to 4% this year, notably faster than last year's 2.3% gain.
Tighter world grain supplies on top of extra ethanol demand could send those numbers even higher.

8 Comments:

At 6/22/2007 8:37 AM, Anonymous Bob Wright said...

The text of the article states May food prices rose 4.7% but the graph shows a rise of 3.9%.

Am I reading this wrong?

 
At 6/22/2007 8:51 AM, Anonymous Jeff said...

The text of the article states May food prices rose 4.7% but the graph shows a rise of 3.9%.

I read it as: Food prices are up 4.7% May '06 to May '07; or they were up in May at an annual rate of 3.9% (Jan-Dec).

 
At 6/22/2007 3:56 PM, Blogger Mark J. Perry said...

Either Jeff is correct, or the text is wrong! I didn't prepare these graphs, they are from the IBD, and there is the possibility that the text should have said 3.9% instead of 4.7%.

 
At 6/23/2007 6:48 AM, Anonymous Anonymous said...

This comment has been removed by a blog administrator.

 
At 6/24/2007 8:28 AM, Blogger DeathSweep said...

I barbecue my corn using a gas grill. So sooner than later I guess I'd better be prepared to change my eating habits from corn to weeds and find myself a nice hot rock that I can saute them on so that I can save my money for taxes that allow mw to live so well.

 
At 6/24/2007 10:01 AM, Blogger juandos said...

What's really sad is ONLY deathsweep seemed to understand the situation...

The others were splitting hairs over a silly graph...

 
At 6/27/2007 4:27 PM, Anonymous jeff said...

What's really sad is ONLY deathsweep seemed to understand the situation...

As a community college economics instructor I can assure you I am aware of the situation and ramifications (as is Prof. Perry). Mr. Wright asked a question, we responded with our understanding of the situation. That doesn't negate any other observations or intuitions we may have regarding agricultural markets. Sheesh......

 
At 7/06/2007 10:29 AM, Blogger juandos said...

"Mr. Wright asked a question, we responded with our understanding of the situation"...LOL!

O.K. now how about getting a grip on the real world...

 

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