During a 15-month period when corn prices nearly doubled, consumer food prices actually increased by less than average, the National Corn Growers Association (NCGA) has learned. According to the U.S. Department of Commerce, at present rates, food prices will climb by only 3.3% in 2007.
“On a monthly basis, the Bureau of Labor Statistics (BLS) monitors average retail food prices for more than 120 common items,” explained NCGA Director of Ethanol and Business Development Geoff Cooper. “The BLS data is carefully controlled and based on surveys of hundreds of retail outlets.”
NCGA’s analysis of the monthly Consumer Price Index (CPI) reports show almost no relationship between the corn prices and food prices. “The food index rose 0.3% in March, following larger increases earlier this year. Grocery store foods also rose less in March, largely reflecting a downturn in the index for fruits and vegetables.”
The BLS sample includes dozens of items that include corn as a direct or indirect production input,” Cooper said. “It includes survey data from a variety of U.S. markets, including large cities and small towns in all regions of the country.”
The Department of Commerce, which issues the BLS reports, notes that higher energy prices, particularly for petroleum products, are responsible for much of the rise in the CPI. “The index for energy, which rose 2.9% in all of 2006, advanced at a 22.9% (seasonally adjusted annual rate) in the first quarter of 2007 and accounted for about 41% of the first quarter advance in the overall CPI for urban consumers. Petroleum-based energy costs and charges for natural gas and electricity contributed about 29% and 12%, respectively,” the department notes.
NCGA’s analysis of the CPI can found here by clicking here.