Thursday, May 08, 2008
High costs at the gas pump may be a pain when you drive, but now it's becoming a burden at the grocery store as well. Few people take the time to consider that the foods they eat are not grown locally; rather, they are flown in from around the world and combined. The costs to transport these food products are rapidly rising due to the increased cost of fuel. This has directly caused higher food costs for consumers as a result.

There is also another way that energy is involved. Government incentives designed to increase the usage of ethanol have led to tons of farmland being converted to meet the demand for corn. This is land that may have been previously used for growing wheat or other edible crops (ethanol corn is not the same as human edible corn). Currently, ethanol crops account for around 7% of the corn crop, but this percentage is only growing.

In the end, it is clear that rising fuel costs have contributed to rising food costs. The cost of transportation for food products have skyrocketed and forced manufacturers to raise their prices. Meanwhile, high oil costs have led to government incentivizations to produce ethanol. This has caused a reduction in the number of farm acres used for human-edible food products. This is all bad news for the consumer pocketbook!

5/8/2008 6:33:43 PM UTC  #    Comments [0]  |  Trackback