High Grain Prices Driving Up Food Costs

“We’re not the only meat company facing this, and we’re not the only food company facing this,” Jeffrey Ettinger, chief executive of Austin-based Hormel, told analysts Friday. “It’s kind of a national decision that’s been made to subsidize domestic production of ethanol, somewhat at the expense of what consumers are going to pay for food.”

So, if you’re able to get E-85 for $2 per gallon, but your food bill has jumped by 25-50%, is it worth it?

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8 Responses to High Grain Prices Driving Up Food Costs

  1. Burdock says:

    It doesn’t bother me. I don’t eat animals that are fed on corn and I avoid HFCS. That stuff shouldn’t be in our food anyhow. I just wish the corn subsidies would go away period-whether for grain or for the ethanol. Then maybe farmers n the Midwest would go back to growing real food. It’s a shame all of that wonderful, prime soil is used for food additives, sweeteners, and grain for animals. I’ve felt this way even before Michael Pollan’s book.

  2. Bart says:

    I agree on both points, Burdock: the subsidies should go away period, and people should try to avoid eating food products that have that crap in them.

    Most Americans, though, either don’t know, don’t care, or don’t have the money to ‘eat right.’ Based on the popularity of fast food and hyper-processed foods, most Americans are going to get hit in their pocketbooks and probably won’t know why, at least for a while.

  3. Beo says:

    I’m in BB camp-the effects this will have on my family are close to nill-our protein is from beans and grain. However, a good deal of our corn gets exported to the third world where even a fractional increase in the cost of corn for mash will have devastating effects. McDonald’s and Hormel can whine all they want, but causing malnutrition oversees so we can drive Fords is criminal and appears to have been given zero thought by the Bush Administration. I guess after getting Exxon to record profits, Con-Agra and ADM felt alittle jealous.

    Oh, by the way-we eat very healthy and save about $200 a month in our grocery bill compared to my conventional friends. Dry organic beans are exponentially cheaper than CAFO beef!

  4. Bart says:

    In the short term, you’re probably right, Beo… over the long term, I wonder.

    In Kunstler’s latest blog entry he started with this little tidbit:

    ———–
    One of the farmers who organized the Pennsylvania Association for Sustainable Agriculture’s annual meeting put it nicely: “The ethanol craze means that we’re going to burn up the Midwest’s last six inches of topsoil in our gas-tanks.”
    ———–

    If that’s even close to being true, it will affect everyone sooner or later I think.

    On a tangent, which dry beans are you planting?

  5. Beo says:

    I guess I see ethanol as a stepping stone (though we need to get off of the corn kick onto switchgrass or cellulose) for 2 reasons. First it gets my neighbor’s thinking that oil is bad and that subtle psychological shift will be powerful. Second, ethanol may not be making alot of sense on a net energy basis it makes much more sense on a Carbon level. I want to see Flex Fuel Hybrids so I don’t have to choose, and I want them to diesel. Oh, and plug in. That way I am only using about 10 gallons of oil annually in a gasoline car or in a diesel with B100. MY Insight got me down to about 250 from the average Joe’s 1000, but we need to do better.

    Ironically, we have decided to not grow dry beans. Due to space concerns right now, I limit what I grow to 2 broad fields-to either expand my horticultural knowledge on how to grow something or to offset major needs at the grocery store. We have a good source of local(ish) beans, and I can grow legume easily. Example: we are planting as many as 40 tomato plants this year (up from 14) as we have been buying canned tomatoes since November, and we are adding potatoes this year because I have never grown any and need to figure it out. Amish Paste because they do it all and Purple Viking as they store well and are purple which is cool. Both are from Seed Savers.

    If I had to choose dry beans I am enamored with SeedSavers Good Mother Stallard or Jacob’s Cattle.

  6. Bart says:

    The problem I see is that Ethanol is simply being touted as a replacement for gasoline, which may work for a while at best. I still think that not much constructive will happen until motor fuel becomes too expensive for most people to continue using at today’s rates. We have shown that even doubling the price isn’t enough to make people change their ways.

    A carbon tax, perhaps? I haven’t read much about these initiatives, but hitting people in their pocketbook seems to be the best way to get any kind of change in habits among more than a few people…

  7. Beo says:

    Unfortunately those hit hardest are the ones with the least room to wiggle. I was toting a $2.50/gln gas tax at a dinner party a year or so ago as a means to solve our excessvie consumption when I friend stopped me dead. They work with inner city job placement. Most of their clients drive 1980’s cars-most with V8’s becuase they are dirt cheap to buy and repair. A Caprice Classic also happens to get wicked bad gas mileage. I am much more in favor of a much firmer gas guzzler tax on new cars/trucks (starting at 35mpg and ramping up quickly), with carbon taxes phased in over say 5-10 years to get to that $2.50 tax level to get us on par with Europes Energyrate.

    People must change, but the social factor must be considered-ease them in, and in the mean time tax those who can afford it and use that tax as a fee-bate to offset the pain on those doing good (electric car incentives) or who are hardest hit (mass tranist coupons for the working poor). Budget nuetral, carbon negative.

    I am American enough that I am willing to let my neighbor drive their Hemi. But they also need to be European enough to pay the governement a fair stipend for poisoning our air with their sense of etitlement and need for compensation.

  8. Bart says:

    As long as we continue to embrace the idea of a ‘fair market’ economy, pretty much any solution that has a prayer of being enacted into law will probably hit the lower classes the hardest. Anything that smacks of socialism such as rationing or progressive taxation of carbon based on income, etc., is doomed to failure, I think.

    The system as it works right now benefits those who can afford to navigate through the various loopholes that are in place. Until a lot more people start feeling the pain, I think that’s the way that it will stay, fair or not.

    I wonder if phasing in carbon taxes over a 5-10 year period is fast enough? At the rate the major oilfields are going into decline, economics may force the issue before then…

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