Study: Energy Prices, Not Corn, is Rising Food Prices

Ethanol critics and many in the media charge that the rising price of corn due to growing ethanol demand is the major culprit for moderately rising consumer food prices. Conspicuously absent from the discussion is the chief reason for increasing food costs: escalating energy costs.
According to a new analysis of food, energy and corn prices conducted by John Urbanchuk of LECG, LLC, “rising energy prices had a more significant impact on food prices than did corn.” Rising energy prices have twice the impact on the Consumer Price Index (CPI) for food than does the price of corn, according to the report.

“Energy costs have a much greater impact on consumer food costs as they impact every single food product on the shelf,” said Urbanchuk. “Energy is required to produce, process, package and ship each food item. Conversely, corn prices impact just a small segment of the food market as not all products rely on corn for production.”

Wisconsin Ag Connection