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.