REUTERS - Rising US food inflation, now a 25-year high, is reminiscent of the 1970s and will continue for the next five years due to growing world economies, increased food demand and a sharp expansion of corn-based ethanol production, a top food economist said Friday."What happened in the early '70s and what is happening today is that we have moved food input price to a new plateau. Ultimately, the consumer is going to have to absorb those increased costs," said Bill Lapp...
Futures prices on the Chicago Board of Trade, the benchmark for commodity grain and soy markets, have risen to multi-year highs this year. Wheat hit an all-time high of US$9.81-3/4 a bushel just on Friday. Soybeans on Friday reached over US$11.60 a bushel, a price not seen since 1973, and corn rose to US$4.37-1/4 in February, the highest level in a decade.
"The underpinnings for the higher commodity prices are world economic growth, a weak dollar and increased use of our corn crop for the production of ethanol," Lapp told Reuters in an interview.
While most of the US corn crop, or 43 percent is fed to livestock to produce meat, dairy products and eggs, an increasing percentage is being used to produce ethanol. Twenty-four percent of this year's corn crop will be turned into ethanol, up from just 14 percent two years ago.
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