Richard Greubel, president of Tyson Foods’ international division, blamed ethanol for pushing up food prices in a recent news article.
The rising price of foods in local supermarkets is a direct result of Congress’ increased mandate for U. S. ethanol production, a Tyson Foods Inc. executive told University of Arkansas at Fort Smith students Monday.
He claims that ethanol production has caused corn prices to rise which will push up meat prices. And while it is true that corn prices have gone up in part because of ethanol production, any direct link is much harder to find.
It is also true that retail prices for chicken has gone up. According to the USDA Economic Research Service (ERS) the retail broiler composite has gone up from $1.674 per pound in August 2007 to $1.741 in August 2008. But the numbers that are most telling are the wholesale prices for the same time periods. The wholesale broiler composite went from $.814 per pound in August 2007 to $.719 in August 2008.
In other words producers at the lower end of the chicken supply chain are receiving less money in August of this year compared to last while at the retail level prices are higher. So the increased cost at the retail level that we were lead to believe was to cover rising feed costs isn't being passed down to the people actually buying the corn.
Note: According to this article the same thing appears to be happening in the pork industry as well.
Retail pork price in August were up 1.9 percent from July and up 2.9 percent from August of 2007. For January-August retail pork price were up 1.3 percent from a year earlier. Only the marketers benefited from the higher retail prices. The processor-retailer margin was up 1.8 percent and the packers' margin was up 8.6 percent from 12 months earlier. The producer’s average price for January-August was down 1.2 percent from 2007.