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1 freetoken  Tue, May 10, 2011 6:48:50pm

Americans pay so much for packaging, advertising, and stocking/retail that changes in the basic food item are hidden many times. There are exceptions (fresh fruit) where I've seen the local prices over the past three years climb.

2 Killgore Trout  Tue, May 10, 2011 7:22:19pm

re: #1 freetoken

Americans pay so much for packaging, advertising, and stocking/retail that changes in the basic food item are hidden many times. There are exceptions (fresh fruit) where I've seen the local prices over the past three years climb.

I've been noticing meat prices lately. A leg of Lamb that would have cost 12 bucks last year is over 20 bucks now.

3 Mich-again  Tue, May 10, 2011 8:50:47pm

And one factor in rising prices for food is that we are mandating a big chunk of the US corn crop to be converted to ethanol so that we can leave our domestic oil that is sitting in the ground for the taking alone.

[Link: pathteacheroneword.blogspot.com...]

4 freetoken  Tue, May 10, 2011 8:57:32pm

re: #3 Mich-again

It's unclear to me what role the US ethanol mandate plays in the global food price. Obviously for the US price of corn there is a relationship, but world food prices are driven by growing demand, the cost of energy (oil), and weather/climate problems.

5 SpaceJesus  Tue, May 10, 2011 8:59:25pm

And when the fresh water crunch hits the developing world, it's going to be even worse. Rice requires a ton of water to grow, and with increased water scarcity, not only are folks not going to have access to fresh water but the price of rice is going to skyrocket further.

6 Mich-again  Tue, May 10, 2011 9:10:03pm

re: #4 freetoken

Well the USA is the biggest grower and the biggest exporter of corn so if we mandate 8+ billion gallons of ethanol that means that a significant chunk of the corn supply is "ear"marked for gas tanks, not dinner tables.

Shortages and gluts wreak havoc on the linearity of the supply-demand curve. It doesn't take a huge shortage to create a sellers market and skyrocketing prices.

7 Mich-again  Tue, May 10, 2011 9:12:25pm

re: #5 SpaceJesus

Agriculture and fresh water supply are strategic strengths of the USA.

8 SpaceJesus  Tue, May 10, 2011 9:25:08pm

re: #7 Mich-again

Indeed. Same with Canada. We are seeing water scarcity in the southwest though, and this needs to be met.

9 Killgore Trout  Tue, May 10, 2011 9:25:33pm

re: #4 freetoken

It's unclear to me what role the US ethanol mandate plays in the global food price. Obviously for the US price of corn there is a relationship, but world food prices are driven by growing demand, the cost of energy (oil), and weather/climate problems.

It's discussed in page 2 of the article....

At the same time, the United States, which once was able to act as a global buffer of sorts against poor harvests elsewhere, is now converting massive quantities of grain into fuel for cars, even as world grain consumption, which is already up to roughly 2.2 billion metric tons per year, is growing at an accelerating rate. A decade ago, the growth in consumption was 20 million tons per year. More recently it has risen by 40 million tons every year. But the rate at which the United States is converting grain into ethanol has grown even faster. In 2010, the United States harvested nearly 400 million tons of grain, of which 126 million tons went to ethanol fuel distilleries (up from 16 million tons in 2000). This massive capacity to convert grain into fuel means that the price of grain is now tied to the price of oil. So if oil goes to $150 per barrel or more, the price of grain will follow it upward as it becomes ever more profitable to convert grain into oil substitutes. And it's not just a U.S. phenomenon: Brazil, which distills ethanol from sugar cane, ranks second in production after the United States, while the European Union's goal of getting 10 percent of its transport energy from renewables, mostly biofuels, by 2020 is also diverting land from food crops.


I know this has become a wingnut talking point but in the past the US has been able to act as a buffer i the case of food crisis but we're now using that food as biofuels. Same with Brazil.

10 Randall Gross  Wed, May 11, 2011 4:50:10am

re: #4 freetoken

I wrote about this a couple of years back, but the world bank and UN have both confirmed that corn ethanol is impacting grain and other starch staple pricing. The wingnuts are ambivalent on this one because ADM and the other people pushing corn ethanol in the US are all big red state political lobbyists.

Energy price fluctuations also impact food pricing heavily because they are additive throughout the cycle. In one form or another energy is used for planting, growing, harvesting, transport, processing, storage, and sales of food. Each step adds energy costs.

11 Randall Gross  Wed, May 11, 2011 4:50:46am

pimf "world food bank" not world bank.

12 RogueOne  Wed, May 11, 2011 5:16:40am

re: #10 Thanos

I wrote about this a couple of years back, but the world bank and UN have both confirmed that corn ethanol is impacting grain and other starch staple pricing. The wingnuts are ambivalent on this one because ADM and the other people pushing corn ethanol in the US are all big red state political lobbyists.

This might come as a shock but not every issue is a left vs right argument. The fight over ethanol subsidies crosses party lines. (The Ryan plan in the house calls for the subsidy to expire.) The battle is between farm states and non:

PRO:
Ethanol credit/tariff elimination amendment offered
[Link: westernfarmpress.com...]


Senators Coburn, R-Okla., and Feinstein, D-Calif., have filed an amendment that would eliminate the 45 cents/gallon blender’s tax credit and the 54 cents/gallon tariff on imported ethanol. Sen. Coburn said the credit costs $5 billion a year.
.....
Sens. Cardin, D-Md., Webb, D-Va., Burr, R-N.C., Collins, R-Maine, and Risch, R-Idaho, are co-sponsors.

In March, Sen. Coburn made an effort to introduce the legislation but was blocked by Senators who support the ethanol tax credits, protective tariffs and the consumption mandate. Majority Leader Reid, D-Nev., reportedly then agreed to allow a vote on the proposal at a later date but with the condition that it will require a two-thirds majority for adoption.

CON:
Corn Belt Senators Defend Ethanol Subsidies
[Link: green.blogs.nytimes.com...]


A bill introduced in April by Charles Grassley, Republican of Iowa, and Kent Conrad, Democrat of North Dakota, would extend the measures until 2015.
.....
The letter was signed by 16 senators, including Al Franken, Democrat of Minnesota, and John Thune, Republican of South Dakota.

13 Randall Gross  Wed, May 11, 2011 5:45:33am

re: #12 RogueOne

Nope, well aware of that oil vs. ethanol dynamic. If the Dems were smart they would capitalize on more of the regional schisms (e.g. there's also a west state / mid state divide, and some splits on transport in mid sized city regions.)


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