How Energy Prices Are Connected To The Rising Food Prices

By mahir | April 5, 2011

Rising energy prices are intimately connected with rising food prices. As food prices continue to increase, it remains important to examine the causes behind this crisis. The price of meat in the United States is likely to skyrocket, since corn prices continue to rise.

The United States government requires that producers mix ethanol with gasoline, and the mandated proportion of ethanol continues to increase. This law magnifies the demand for corn, and forces prices up. While the initial effect is seen in foods that directly use corn, the price increases will spread to protein. Since cows, chicken, and pigs primarily feed on corn, as corn prices increase the prices of beef, poultry, and pork will also increase.

Farmers want to capitalize on high prices, so they plant more corn. Unfortunately, this decreases the amount of other cereals grown, causing the prices of wheat, rice, and soybeans to rise, too.

Of course, gas prices increase along with corn prices, making the shipping of food more expensive. Consumers absorb these costs as well.

Americans will face rising meat and grain prices in the coming months. To read more about the situation, click here. For more optimistic news about strong corn and soybean reserves, click here.

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