Food Price Truth

Food Price Facts

Food Price Myths

Resources

Quotes

Data

Food Price Facts

Did you know:
The biggest reason food costs more today is fuel prices. USDA Secretary Schafer recently stated: "Higher oil prices affect much more than just the cost of driving; they are actually one of the major factors behind higher food costs."

Did you know:
The USDA 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."

Did you know:
Ethanol should actually keep food prices down. According to Merrill Lynch, biofuels have reduced gasoline and diesel prices by 16-25%. If gas prices go up, food costs go up.

Did you know:
While it is true that U.S. food prices have increased about 4.5% this year, nearly all experts agree that today's food price increases can be attributed to a combination of factors, including record oil prices, the declining value of the U.S. dollar, increased demand for grain from developing economies around the world, rampant speculation on the commodities market, weather related production shortages worldwide (especially wheat), and food company profiteering.

Did you know:
Weather related events have always affected food prices and that is no different today. In 2007, the U.S., Canada, Australia and Europe all experienced production shortfalls due to weather related causes.

Did you know:
Ethanol is made from "dent" or yellow "feed" corn. People accuse ethanol of increasing the price of beer, pasta and tortillas, which is curious because none of those products are made from "dent" corn.

Did you know:
Major food companies are profiting nicely from the food price crisis: Land O'Lakes (earnings up 16%), Kraft Foods (earnings up 21%), Sara Lee (net income up 55%), and General Mills (profits up 61% from 2007). Kellogg Co. stated in its own press release that the company's profits grew 9% in part because of "recent price increases."

Did you know:
Oil companies are enjoying record profits, while consumers continue to pay more. ExxonMobil reported profits in excess of $40 billion last year, which is the largest profit any corporation has ever received at any time in history.

Did you know:
There are 56 pounds of corn in a bushel. When corn is $4.00 per bushel, a pound of corn is worth 7.1 cents. According to the Beef Checkoff, it takes 2.6 pounds of corn to produce one pound of beef. This equates to 18.6 cents worth of corn when corn is $4.00 per bushel. The National Pork Board says it takes 3.6 pounds of corn to produce one pound of pork. This equates to 25.7 cents worth of corn when corn is $4.00 per bushel. It takes 2.0 pounds of corn to produce one pound of chicken, according to the National Chicken Council. This equates to 14.3 cents worth of corn when corn is $4.00 per bushel.

Yes, U.S. corn ethanol production has increased the demand and price for corn. But it is misleading to suggest that this price dynamic is a driver of food prices …;

"Pundits and food and meat processors have lamented this year's rise in corn prices with little attention to the long-term declining trends in the real price of corn. The implication that rising corn prices warrant grocery price hikes ignores the historical grocery price insensitivity to corn prices."
-Food & Water Watch
"Most of the corn price increase is due to the higher oil price, not the ethanol subsidy … Put in round numbers, when crude went from $40 to $120 a barrel, corn went from $2 a bushel to $6 a bushel, a tripling of both prices. About $1 of the corn price increase was due to the subsidy and $3 to the higher crude price."
- Wally Tyner, Agricultural Economist, Purdue University

An April 2008 report published by Texas A&M concluded that, "[u]nderlying all the changes in agriculture and the economy is $100 per barrel oil and, generally, higher energy costs … Important food items like bread, eggs, and milk have high prices that are largely unrelated to ethanol or corn prices, but to fundamental supply/demand relationships in the world."

Worldwide food prices have also increased considerably. But biofuels only consume roughly 4% of the world's grains.