Why
Food Prices Are Increasing
Corn is fueling more than your
tummy and your car
There are many reasons that food
costs are going up now and having only one reason is a bit too
simplistic. Reasons such as the low value of the dollar,
depressed prices, and drought all have 
their
place in this formula. However, one thing our leaders aren't
talking about is the increase in cost of food from turning the
base of our food supply into something we burn in our cars - and
at a cost higher than the cost of oil.
It sounded too good to be
true. Ecologists and government sources that
"knew" told us that by switching over to biofuels for
our cars (gas with ethanol made from corn or other biological
resources), the cost of gas would go down. After all, we
just had all that corn just sitting there doing nothing,
right? We were saving our Earth, using our resources, more
efficiently, and depending less on foreign fuel sources.
So what happened?
With gas prices hovering the
$4.00/gallon range, food prices are out of sight, and lets see - oh
yes, we are no less dependent on foreign oil than we were
before. As it turns out, it actually costs more in energy to
produce a gallon of ethanol than it saves.
Simply put, they have and are
messing with the supply and demand of the single most widely used
crop in our society and with no gain whatsoever.
Ethanol and the cost of
living
Let's first point out that
biofuels are yet another government inspired program. We
should have known from that alone that the whole thing was another
Apollo 13 moon shot.
You will see quite a few
government and green-movement claims that moves in this direction
has nothing to do with scarcity or food prices. Apparently
they presume that the laws of supply and demand and increased
costs just don't apply to things they are responsible for.
Simply put, when you take something out of your mouth and burn it
in your car, don't be surprised if you become a bit hungrier than
you were before.
These politicians are the same
people that claim victory even when they lose elections.
Greeners also have some rather shallow blame claims, but again
these are the people that claim victory when they defeat a
proposal to replace a 50 year old junk nuclear power plant with a
newer one with greater efficiency and less risk to damage or
terrorist attack.
Supply and Demand
What we come down to of course is
simply the laws of supply and demand, and these have been around
as long as man has. Making claims that they are just not
applicable here and some other mystical force is at work is beyond
ridiculous. A large amount of corn has been taken out of the
marketplace and prices for corn have gone up nearly 250% in the
last couple of years. These are simply statements of
fact. Anything you produce with corn will cost
more.
The effects of the increased
costs of corn aren't just on on your cornbread and
tortillas. They are far and wide, and as with anything where
supply and demand are volatile, those on fixed incomes suffer the
most.
Corn is only one grain and while
some applications are specific, others can use different grains
depending upon which is costs less. When you decrease the
availability and increase the cost of one commodity, this will put
upwards price pressure on all related commodities. These
would include, wheat, oats, barley, rice.
It also puts pressure on other
things with similar derivatives for products like cooking and food
oils. When corn oil goes up, so do the products that make
other oils. When the cost of feeding corn to livestock goes
up, so does the cost of meat.
If we were talking about an
increase in the demand and therefore price of There are no sectors
of our economy that are untouched by increased prices in such a
general and widely used commodity like corn.
The End Game
What we have here is a simple
catastrophe of our own making by following people with an agenda
who have little to no understanding that they are monkeying with
the fundamental laws of supply and demand for our nation's number
one and most valuable resource next to air and water.
When
they said, "Let's take your food, put it in your car and burn
it up", we thought that was a good idea and believed they
knew what they were talking about.
Considering this one, blowing it
with Medicare and Medicare Part D, one has to really wonder what
our Representatives and Senators have in mind for us with
government run healthcare for everybody.
But let's here and forever
decline them the opportunity to ever again turn our food into
something else, just because they can. These are people that
can't be trusted to balance a checkbook let alone circumvent the
primary law of economics. We certainly don't need them
playing with the food supply.
