ENERGY PRICES HAVE AT LEAST TWICE THE IMPACT AS CORN PRICES IN THE GROCERY AISLE

Despite the recent media coverage conveniently blaming grocery price increased on corn-based ethanol, new research from economist John Urbanchuk of LECG, LLC found that rising energy prices have at least twice the impact on the Consumer Price Index (CPI) for food than does the price of corn.

The study’s numbers show that consumers might pay an additional $10 for groceries due to corn prices, but at the same time they pay an additional $20 to $30 due to escalating fuel prices.

“Critics of ethanol are stirring controversy where none exists, because higher food prices have more to do with $3.50 per gallon fuel than with $3.50 per bushel corn,” said Brian Jennings, ACE Executive Vice President. “While corn prices might add $10 per year to a person’s grocery bill, skyrocketing gasoline prices are taking an additional $10 a week out of peoples’ pocketbooks.”

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