# Am I missing something about rising food prices?



## BillS (May 30, 2011)

Check out these facts:

http://www.accuweather.com/en/features/summer-harvest/drought-impacting-livestock-ef/68206

"Corn prices have soared 50 percent since mid-June, in part due to shrinking crop yield projections by the Department of Agriculture."

http://www.huffingtonpost.com/2012/07/25/us-drought-food-prices_n_1702852.html

"The drought gripping more than half the country is a major reason why consumers can expect to pay 3 percent to 4 percent more for groceries next year, the U.S. Department of Agriculture said Wednesday."

Can someone tell me how a 50% increase in corn results in food prices only increasing 3%-4% next year? Corn is used to make high fructose corn syrup which is used instead of sugar in almost everything. Corn is in all kinds of things we eat. Is the government right or are they just lying about how much food costs will go up?


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## hiwall (Jun 15, 2012)

I certainly see your point but many food items have nothing to do with corn. Tuna is not going to go up due to high corn prices for instance. But many things including most meats I would expect to increase in price. Pet owners will see most pet foods also rise in cost. No matter how much things go up, I am sure it will get down-played by the government and the media.


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## Marcus (May 13, 2012)

BillS said:


> Check out these facts:
> Can someone tell me how a 50% increase in corn results in food prices only increasing 3%-4% next year? Corn is used to make high fructose corn syrup which is used instead of sugar in almost everything. Corn is in all kinds of things we eat. Is the government right or are they just lying about how much food costs will go up?


I read something on Yahoo that went a little further in explaining it. According to the article I read, the actual price of the corn is a minor factor (1-2%) in what the retail price is in the store. Most of the cost is in processing, transportation, and distribution.

It may have been the same article or elsewhere, but I also read that the US now longer has an 18 month supply of grain stored in silos. Due to JIT distribution models, most of the silos are now empty. So an issue with anything in the distributing network will cause shortages. Just another reason to store your own.


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