SD Corn

As the drought continues to affect crops across the country, many have begun to speculate about what it means for food prices. Corn is without a doubt a very important part of our world’s food system, but the effect it has on prices at the grocery store is not.

For instance, at $8 per bushel, the amount of corn in a box of corn flakes costs about 12 cents total. At that same price per bushel, there’s only about 37 cents’ worth of corn in a pound of hamburger. As you can see, corn remains an inexpensive food ingredient.

In fact, it’s not only corn but all of American agriculture continues to deliver abundant and affordable food as consumers spend a lower percentage of their income on what they eat than any other country in the world.

As bad as things may seem in the news, it’s still far too early to begin to panic about what kind of crop America’s farmers will produce before they get a chance to do so.

As the United States Secretary of Agriculture Tom Vilsack said in a statement last week, “We’re not going to know the full extent of this drought until the cotton is picked, the beans and kernels are counted.”

“It takes a long time for prices to work through the system,” added Vilsack.

If you are concerned about food price spikes, just take a look at America’s food dollar to see what kind of impact different industries have on what you spend at the grocery store. You will see just how little goes to farming and much goes to processing, energy, transportation and packaging.

It’s amazing how misinformation can spread these days with nothing other than uneducated opinions and easy-to-blame targets. This seems to be especially true in regards to our rising food costs and assumptions of what’s driving up those costs. Some media blast ethanol production and high corn prices as the reason for your growing grocery bill but those claims simply lack the facts.

First things first. According to the USDA, only 11.6% of every dollar spent on food goes back to its origins, the farm. The very place where our food is raised holds a very small percentage of what determines its retail price.

Next you can look at corn specifically and its price implications on products consumers buy regularly at the grocery store.

Even with corn at $7 per bushel, its effect on the prices of the food we eat remains very minimal. So while that seven dollar number seems like an easy answer to everyday consumers, its’ impact doesn’t justify the blame. But what exactly is causing the rise in food prices?

As this blog has stated before, if you’re looking for a real culprit in the reason behind rising food prices, look no further than outlandish oil prices which hold our country hostage. Oil related expenses total 33% of each dollar spent on food, three times more than what goes back to America’s family farms.

All in all, America’s farmers continue to provide its’ citizens with the most abundant, safe, nutritious and inexpensive food in the entire world, and our corn crop is a major contributor to that success.