What’s good for America

Oct. 12, 2007
America's thirst for ethanol and a federal mandate for the U.S. to use 7 billion gallons (26.5 billion liters) of renewable fuels by 2012, caused corn prices to start rising sharply in September, reports the International Herald Tribune. Since feed is one of the largest costs in the livestock and dairy industries, higher food costs were inevitable. According to the Labor Department, ground beef rose 6.7 percent, chicken breasts are 6.9 percent higher and whole milk skyrocketed 26 percent. But that's not the only reason for rising prices. Prosperous Asian consumers are eating more meat than e ...
America's thirst for ethanol and a federal mandate for the U.S. to use 7 billion gallons (26.5 billion liters) of renewable fuels by 2012, caused corn prices to start rising sharply in September, reports the International Herald Tribune. Since feed is one of the largest costs in the livestock and dairy industries, higher food costs were inevitable. According to the Labor Department, ground beef rose 6.7 percent, chicken breasts are 6.9 percent higher and whole milk skyrocketed 26 percent. But that's not the only reason for rising prices. Prosperous Asian consumers are eating more meat than ever before driving demand for American livestock and feed. Add to that a weakened American dollar, and American food is more affordable for buyers across the pond. It may be a boon for exporters, American farmers and grain traders, but dairy companies and many meat processors, including the largest purveyor Tyson Foods Inc., have been forced to pass price increases along to consumers.  Sticker shock is also affecting the processing industry in general. As ingredient prices rise, the cost of making prepared foods follows. Passing those costs along to consumers is the problem. Most food companies have tried to absorb the additional costs, but it's becoming more difficult every day as prices keep rising dramatically. Consumers are reeling, especially those with large families, who already have a tough time making ends meet because of higher gasoline prices and a real estate market that is depleting their future security. Brands too could suffer as consumers turn to private label products. It's a conundrum we have to face as a nation. Do we want ethanol or do we want affordable food? Debate over ethanol production

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