So, food prices are soaring (link via Glenn Reynolds). What's the cause? Loose money? Misguided stimulus spending? Increased demand for food? Decreased supply? Misguided government programs (am I being redundant)? All of the above?
Here's one interesting tidbit from the article.
Higher oil prices are also pushing up the cost of food — in two ways. First, the added shipping cost raises the delivered price of agricultural products. Higher oil prices also divert more crops like corn and soybeans to biofuel production, further tightening supplies for livestock feed and human consumption. Conley estimates that more than a third of the corn produced in the U.S is now used to make ethanol.
I don't have the answer to why food prices are soaring. But long-time readers know I am a critic of federal subsidies, protection, and mandates for ethanol (the trifecta of government support). It would not surprise me if the price increases are partly due to the US government's hand-picked solution to our energy problems. Keep in mind what a wise man once said: "there are not solutions, only trade-offs."