Price Pressure

Weird frosts, drought and now ethanol are pushing food prices up.

A study by the Center for Agricultural and Rural Development at Iowa State University found corn prices soaring, and overall food prices up $14 billion from last year because of increased ethanol production.

Ethanol is a gasoline “alternative” made from corn. It takes more energy to produce than it saves.

The researchers speculate that retail food prices in the United States could climb $20 billion annually if crude oil prices reach $65 to $70 per barrel — pushing corn toward $4 a bushel.

Last August it averaged $2 a bushel.

Ethanol production has already forced corn prices up so dramatically in Mexico that many people can’t afford tortillas.

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s