Corn for ethanol
The Patriot Ledger

Dale Rossman drives his combine while harvesting corn on his farm in Spring Mills, Pa. Photo by Associated Press

Once upon a time, corn was just food, but now it is used in fuel, increasing demand and price and making more expensive the cost for everything baked, mixed, added to or otherwise made with corn more expensive.

Congress decided to subsidize Mid-Western corn farmers to grow the crop for ethanol, which is now added to gasoline to stretch our oil supply and reduce dependence on overseas sources for energy.

Good idea, but there was a problem. The supply of corn has not kept pace with the increased demand now that more customers, shooting the price to $5.52 a bushel. It was more than $2 cheaper - around $3.20 a bushel - last year at this time.

Wild weather

Wintry weather in California froze berry production, droughts last year hurt the countries’ breadbasket and floods on the Mississippi this spring already are reducing expectations for crop production.

From biblical day and probably earlier, erratic weather patterns have affect agriculture and there is no real way to plan for it. Given the additional factors working to raise prices this year, government officials and industry experts are widely predicting that weather will be another unwelcome problem.

An Egyptian woman carries bread from a public oven. There have been violent clashes over subsidized bread. Photo by Associated Press

Tough all over

The cost of food is increasing throughout the world. The U.N.’s World Food Program is short nearly $500-million this year and is currently seeking increased donations from its more affluent member countries.

The United States is not alone in dealing with rising food costs and may not even be bearing the brunt of the increases. Lack of bread in Egypt has led to fights in long bread lines. These clashes over bread have led to several deaths in recent weeks. Similar riots have taken place in the African countries of Burkina Faso and Cameroon.

The shortfall in rice and grain has hit Asia hard. Pakistan, Vietnam and India have already banned grain exports in an effort to conserve what they have for their own people.

Food and Energy

A handful of corn is shown before it is processed at the Tall Corn Ethanol plant in Coon Rapids, Iowa. Photo by Associated Press

Record high prices in the oil industry have an affect over the price of food.

Fertilizer used to help crops grow is made from oil-derivatives and the cost of shipping food has gone up with the price of gasoline.

In an increasingly interconnected world, there are not many things the price of oil does not affect.

On the other side, corn and other grains can now be used as a component of biofuels, which may eventually assuage high-oil prices by providing an alternative. But the diversion of grain to making fuel is right now raising beef prices, as grain is used to feed cattle.

Wheat woes

The price of baked goods, flour, and even some beers have all risen due to the price of wheat.

The staple grain trades at around $10.30 a bushel. Wheat prices had never crossed $9 a bushel until September of 2007.