Thursday, January 31, 2008

Ethanol demand pushes corn prices up.

True lovers of organic food have always been willing to pay more for it. They spend $3.99 on a half gallon of organic milk when a whole gallon of conventional milk costs $1 less. But that devotion may be tested. The forces that have driven grocery prices up sharply over the past year, growing demand for food in China and a global biofuels boom, have had an impact on the organic food markets as well. Meanwhile, U.S. farmers haven't kept pace with demand for organic food, sales of which shot up 21 percent in 2006, and that has also sent prices soaring. And supplies of organic soybeans and grains are squeezed, not only are they needed for human consumption, they serve as feed for the animals that will be sent to market as certified organic beef, chicken, eggs and pork. Organic corn that sold for about $200 a ton last fall now commands about $500 a ton. Demand for ethanol in the U.S. and biodiesel abroad has helped send prices of corn and soybeans to record highs. At the same time, the rapid expansion of China, India and other developing nations has multiplied demand for agricultural products for both food and fuel in those countries. By Lauren Villagran, AP business writer.

Because of the demand of ethanol the price of corn and soybeans are going through the roof. So now not only the price of organic food is going up but also the price of all foods are increasing. And this is just the beginning. Farmers want to make as much money as they can, so do you and I. If it pays more to plant corn they will and not plant wheat, sugar cane, cotton and other food products. And because of supply and demand, the price of other products, like corn, will go up. So your monthly food bill will rise, say 20 to 30%. Are you ready to pay $100 to $150 extra for food a month? This will be hard for a family on a fixed income. Maybe if we just leave corn and soybeans for food only and drill for more oil we can save up to $2000 dollars a year. Does it make sense to pay more for food so we can burn corn in our cars? More reading: Corn demand takes toll on gulf

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