UI's Darrel Good: Food Price Hikes Caused by Several Factors, Including Biofuel Production

DECATUR - Public outcry has been loud and furious over surging prices at the gasoline pump in recent months, but everyday expenses at the supermarket checkout also have crept up to put a bigger dent in consumers' checkbooks, food analysts say.

Nationally, food prices have increased in the last year on average by 7 cents per pound of beef, 13 cents for a loaf of white bread, 33 cents for a dozen eggs and 60 cents for a can of frozen orange juice concentrate, among other items, according to the most recent data compiled by the U.S. Bureau of Labor Statistics.

Several factors are contributing to higher food costs for consumers, said Darrel Good, professor of agricultural economics at the University of Illinois in Champaign.

Good said one has been a spike in energy costs that have made processing, packaging and transporting food more expensive for the people who grow, make and sell it.

"It's really unfolded over probably the past year, when we saw crude oils spike higher about this time last year and stay pretty high; and then that coincided right as we've seen very rapid expansion in the biofuels production," he said.

Those biofuels include corn-based ethanol and soy biodiesel, which have increased demand and thus prices for grains and vegetable oils, as well as the foods that use them as ingredients.

"That's going to keep upward pressure on all of our commodity prices," Good said. "I guess the hope is at this point that overall increases in food prices will be 'manageable,' I guess."

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