Corn-based ethanol has often been blamed for the increase in food costs. However, since June corn prices have dropped at dramatic rates while the price of food is expected to keep rising. Here are some facts:
- Corn prices have plunged over 50 percent since peaking at record highs in late June.
- The closing price for corn futures on November 10 was $3.83 per bushel, $4.05 lower than the peak price of $7.88 on June 26. [Source: Chicago Board of Trade]
- Meanwhile, while USDA predicts that food costs will increase 5% in 2008 and another 5% in 2009. [Source: USDA Economic Research Service, http://www.ers.usda.gov/Briefing/CPIFoodAndExpenditures/Data/cpiforecasts.htm, accessed 11/11/08]