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October 2007

News & Media

Increasing Food Prices Could Go Even Higher 
October 11, 2007 

NEW YORK – Economists claim the cost of food is not all due to the country's thirst for ethanol.

When Americans began using more ethanol last year, the cost of grain used to feed livestock for meat, dairy and other products increased. But, economists say international demand for American livestock and feed also is contributing to the increasing costs.

Meat prices have increases 6.7 percent since summer 2006 and the price of chicken breasts has gone up by 6.9 percent. The cost of whole milk has increased a whopping 26 percent, according to the Labor Department, USA Today reports.

Corn prices started rising sharply in September 2006, as the ethanol industry's demand grew, driven by high oil prices and a federal requirement for the U.S. to use 7 billion gallons of renewable fuels by 2012.

Experts do warn that the full impact of ethanol on food prices.

"We have a huge expansion underway," said Robert Wisner, an agriculture economist at Iowa State University. "That will almost certainly tighten grain supplies."