Food and Fuel America.com: Grain Prices Not at Fault for Food Costs

Monday, July 2, 2007

Grain Prices Not at Fault for Food Costs

The Wichita Eagle ran a story Sunday called "Grain Prices Not at Fault for Food Costs" which reports on the reality of food prices. The full article is available HERE. (note, link is now dead. Check out Food vs Fuel is Rhetoric)

Some key points worth highlighting:

Growing demand in Asia has affected prices.
Increases have not generated skyrocketing food prices and they have virtually nothing to do with recent increases in the price of milk.
Food prices are up only 1.5 percent more than last year.
There is inaccurate information out there about corn prices and alternative energy and it just keeps getting reported.
Grain prices do have an impact on animal feed but that translates to small increases at the retail level.
Transportation and energy costs are responsible for most of the increase in prices

The most interesting point in the story shows what industry experts already know:

"Only about 20 percent of the U.S. consumer's food dollar goes to pay for the raw materials received from the farmer. The other 80 percent goes to food marketing services, including labor, packaging, transportation and energy."

Source: The Wichita Eagle