March 08, 2008

Weak dollar, higher demand raise food prices

Area agricultural leaders say that a weakening U.S. dollar and more mouths to feed around the world – not ethanol plants – are largely responsible for the increased prices consumers are paying for food products.

"When you find yourself paying more money for a box of corn flakes at the grocery store, only a few pennies of that increase came from the price of corn," said former Illinois Farm Bureau President Ron Warfield of Gibson City.

Warfield said the price of an 18 oz. box of corn flakes rose from $2.28 a year ago to $3.39 this year. He said 1.6 cents of that increase was caused by higher commodity prices.

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Dave said...

Good article and thanks for the heads-up on the fuel cell article. By the way, check out the Des Moines Register from March 9th for a good story on Iowa exports. They are up 16% because of the weak dollar and will probably hit record amounts this summer with all the grains we are exporting. Seems to me that if we are short on grains we shouldn't be exporting record numbers.

Michael A. Gregory said...

You're welcome. I have been keeping an eye on exports for the last couple of months and for the most part they are up for all agricultural products.

Because of trade agreements and the World Trade Organization, there probably isn't much we could do to stop exports without some sort of backlash. So the only control on how much gets exported is the price.

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