Thursday, June 26, 2008

The Truth About Rising 4th of July BBQ Food Prices

Food price Truth foodpricetruthA new website, Food Price, has entered the food debate with a new report on rising food prices.

Just in time for the summer food season, FoodPriceTruth says that rising 4th of July BBQ food costs more because of skyrocketing oil prices, no biofuels. released a typical Fourth of July barbeque menu that reveals why food costs are on the rise and why the average American family is paying more for items like chicken, pork, fruit salad, potato salad, beer and even plastic cutlery. The menu offers easy to understand information about why continuously rising oil prices are the single biggest reason that food costs are going up.
"Everyone loves a Fourth of July barbeque, but no one loves grocery store prices anymore," said Brooke Coleman, Executive Director, New Fuels Alliance and a Food Price Expert. "The biggest reason food prices are through the roof is because gas prices are through the roof. After all, the typical item at the grocery store traveled 1500 miles just to get there. Anyone who has been to the gas pump lately knows that shipping something 1500 miles is going to make that item cost more."
Here are some food price facts to think about this Fourth of July:

  • Skyrocketing energy bills are making nearly every facet of farming and selling chickens more expensive, particularly transportation. The average chicken sold in the United States travels 1000 miles just to get to the market, because the vast majority comes from Maryland or Arkansas. Source: Univ. of Wisconsin
  • According to USDA, the price of pork chops, ribs and bacon increased by about 2 percent in 2008, but a leading economist at Purdue University attributes 75% of corn cost increases to oil prices. Sources: Purdue University and USDA
  • Retail beer costs are virtually the same as 12 months ago, before Congress passed the biofuels bill. Source: BLS
Potato Salad
  • In the last year, potato prices increased by almost 9%, despite a big 2007 harvest and ample stocks of potatoes in storage; and mayonnaise, like most other products made using vegetable oil, has increased in price as higher incomes overseas mean better diets and more vegetable oil consumption. Neither of these prices are impacted by biofuels.
    Source: AFBF Marketbasket Survey, USDA
Fruit Salad
  • Apples (up 14% this year), bananas (up 26% this year), and orange juice from concentrate (up 32% since 2006) are all more expensive recently. Harvesting fresh fruit requires a great deal of hand labor, which has grown more scarce in recent years, and the cost of freight has shot up with the price of fuel. Source: American Farm Bureau Economists
Plastic Cutlery
  • Not even the most hardened ethanol opponent can blame ethanol for the rising prices of plastic knives, forks, and spoons. Polystyrene -- the type of plastic in your fork -- is produced from crude oil, and the price of crude oil increased by 97.6% in the past year! Source: Energy Information Administration
Blaming biofuels for rising food prices is deceptive. While ethanol has impacted corn prices, the United States Department of Agriculture and the White House Council of Economic Advisors have stated that increased corn demand is only responsible for "3 percent of the more than 40 percent increase we have seen in world food prices this year."

People also forget that biofuels actually help keep food prices down. In fact, according to a report done by Merrill Lynch, biofuels have reduced gasoline and diesel prices by 16-25%. This is because ethanol is blended into gasoline and is cheaper than gasoline. Eliminating biofuels would just push up the price of gas, and thereby make food cost more.


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