I had written about this topic previously in an article entitled, “Is Corn a Food, a Fuel, or Both?” on BiomassAuthority.com.

Corn is so cheap that it costs less than firewood to burn as a heating fuel. Farmers have endured $2/bushel corn prices for nearly a decade which doesn’t even cover the cost of producing it. Now with another ready market for corn, namely biofuels, growing corn is finally starting to make economic sense for farmers. It may be what allows them to become self-sufficient and not so dependent on taxpayer subsidies.

The annual energy budget for a human is about 1% for food and 99% for energy required for transportation, electricity, and heating fuel. We’re oblivious to this today because much of the fuel for the latter activities come from 100 million year-old biofuels in the form of natural gas, coal, and oil. Someday they’ll be gone and we’ll realize that food and fuel are really the same substance, i.e., energy that was once part of the sun and subsequently converted to biomass through photosynthesis.

We’re starting to get an inkling of it now because as traditional fossil fuels increase in price, alternatives like biofuels are getting to become economic alternatives to them and so we are starting to see the food/fuel connection.

All kidding aside, while the decrease in supply does contribute to it the price increase, I think it’s the slope of the demand curve that is the main force behind the price increases. Simply put, there are more people on the planet who like to eat on a daily basis, and certain commodities like corn and rice are good foundations in many food products.

I don’t think Malthus is right here, but given the fact that the world population is increasing, the price of corn will continue to increase in the foreseeable future. The rate of the price increases when you add in things like biofuel mandates, government subsidies to NOT plant certain agricultural products, etc.

Most people are already pressed for time & unless there are strong factors (such as yours) they won’t be inclined to buy ingredients. More people will either switch to generics or move to a diet that fits their financial rather than their nutritional requirements.