Consumers paying higher food prices as corn prices soar
Glenwood Springs, CO Colorado
GRAND JUNCTION, Colo. (AP) ” Corn prices are as high as an elephant’s eye ” and shoppers are paying for it in higher prices for many items at the supermarket.
“We are going to see grocery store prices show one of the most rapid increases in the last 15 years or so,” said Patrick Jackman, an economist at the U.S. Bureau of Labor Statistics.
Up to 20 percent of the nation’s corn crop is being raised to convert into ethanol, the Grand Junction Daily Sentinel reported. The booming economies in Asia are buying more and more corn from American growers, paying for it with money made on exports to the United States.
“It hits us in a lot of places,” said Dawn Thilmany professor of agricultural and resource economics at Colorado State University. Lands once planted in other crops are now being planted with corn to meet ethanol demand.
The labor statistics bureau says food prices are up 4 percent this year, double last year’s rate. Corn demand is driving up the costs of other foods as much as 10 percent. Corn prices have nearly doubled in recent years.
Corn is used in cereal, to feed cattle, in corn-syrup sweeteners and many other products. Up to 2,500 products use corn, according to an Ontario, Canada, corn producers association.
The Economic Research Service of the U.S. Agriculture Department expects food prices to go up another 4 percent this year. The average increase over the past decade has been 2.5 percent.
Dairyman Dave Nichols says Colorado’s minimum-wage increase also is a factor in higher food prices.
“It all comes out of the customer’s pocket,” Nichols said. “I think most people understand that.”
Thilmany said it is odd that prices are rising as supplies are increasing. Farmers planted more corn this year than at any time since World War II.
“We haven’t seen this for a while,” she said. “It’s not going to stop any time soon, and that’s not a bad thing.”
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