Biofuel boom pushing up some consumer prices

Consumers had cause to cheer, or at least applaud politely, this week when the government forecast summer gasoline prices slightly below last year’s.

The outlook may not be as benign for visits to their favorite supermarkets and restaurants, among other destinations — and perhaps for rates on their credit-card and mortgage bills, either.

Prices on everything from cereal and milk to soft drinks and red meat are on the upswing, due partly to the ethanol and biodiesel boom which is pushing up prices for corn and other commodities.
High energy prices also remain troublesome, regardless whether gas tops $3 a gallon, and clothing costs are up this year, too.

“It feels like we could be in for a period of higher inflation at our stores and restaurants, for a year or two or three,” said Mark Zandi, chief economist at Moody’s Economy.com in West Chester, Pa.

The government reported Friday that wholesale prices rose 1 percent in March, mostly because of the biggest jumps in energy (3.6 percent) and gasoline (8.7 percent) prices since November.

Prices were flat for the month on a wider range of goods that excludes food and energy. While that suggests inflation is not yet in danger of spreading throughout the economy, the news offers little solace to many consumers already feeling greater pressures on their pocketbook spending.

Sun Sentinel