Thursday, September 13, 2007

Corn Prices Unlikely Culprit for Rising Grocery Prices

A noted consumer group, Food and Water Watch, has released a report that finds that increased corn costs are not the reason for rising consumer food prices.

Food & Water Watch examined and compared the monthly farmgate price of corn and retail price of ground beef, chicken, pork chops, and milk since 1980 and found:
  • Contrary to widespread media reports, the long-term farmgate price of corn has fluctuated significantly and has exceeded oft-cited $2 per bushel during three quarters of the months between 1980 and 2006.
  • The real, inflation-adjusted price of corn has trended downwards since 1980 from an average of $6 per bushel in the early 1980s to $2.37 two decades later.
  • During periods of farmgate corn price increases similar to the recent rise, there has been little interplay with retail food costs – in many cases retail food prices fell as corn prices rose.
"In 1980, the farmgate price for corn was $2.70 and a new Ford Mustang cost about $6,000. Today, the base model Mustang runs about $19,000 and corn is selling for as much as $3.70 – meaning the price of Mustangs more than tripled and the price of corn increased by a little more than a third," said Woodall. "America needs agriculture and food policies designed for farmers and consumers and not just agribusiness interests."

The full analysis is available HERE.

Source: Food and Water

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