The largest driving cost in food price increases is the increase in oil costs.
Natural Gas is used to make fertilizer which has increased in cost by 200% in the last year.
Oil is used to make diesel fuel which is used to work the fields.
Oil is used to transport the food to stores.
Oil is used to manufacture the food products that appear in boxes on the shelfs of stores.
Energy is used to heat the stores and cool the food in those stores.
The argument that somehow the costs of food are a result of the increase in corn prices is silly if not out right disingenuous by those making it.
Corn has NOT doubled in price in the last 12 years.
In 1996 Corn was 3.64 a bushel. Today on the spot market it is 6.18
In 1996 Soybeans were $7.91 Today they are $10.64
In 1996 gasoline was $1.25 a gallon. Yesterday it was $3.45
Diesel fuel has gone from $1.22 in 1996 to $4.00 yesterday.
This from the USDA
Quote:The USDA estimates of food input costs as a percentage of retail prices are incorporated into
this study, and are as follows:
Cereal and bakery items: input costs represent 4% of the price paid by consumers
Beef: input costs represent 48% of the price paid by consumers
Pork: input costs represent 27% of the price paid by consumers
Chicken (fryers): input costs represent 50% of the price paid by consumers
Dairy products: input costs represent 38% of the price paid by consumers
Fats and oils: input costs represent 15% of the price paid by consumers
All other (including fruits and vegetables) were assumed to not be impacted by a
sustained increase in the price of corn
Anyone willing to bet that the cost of beef since 1996 has only gone up the 28% that the increased corn prices would have driven it up?
When checking the annual inflation rates it seems soybeans have just barely increased more than inflation and corn has only gone up about double the inflation rate. Meanwhile gasoline has tripled in price and diesel fuel has more than tripled in price.
The increase in costs of fuel and fertilizer have driven the costs to produce corn up by 60% or more. If corn was at $4.00 a bushel, there would be very few if any farmers planting it this year because the cost to produce it would be more than selling price.