It’s becoming a refrain now — ethanol boom adds to rising food prices. Today the Wall Street Journal focuses (subscription required) on higher food prices spurred by the increased demand for corn for ethanol production.
The Journal quotes a variety of food producers — from Tyson Foods to Kellogg Co., and even Wm. Wrigley Jr. and its chewing gums — on the increased costs for corn, as well as high-fructose corn syrup. And it’s not likely that the prices represent a temporary spike — principally because of the government programs promoting biofuels. As economist Kenneth Beauchemin is quoted as saying:
[T]he difference now is that the governments push to promote ethanol, unlike a storm or other temporary factor, “could affect prices for the next 10 years.”