How much of the inflation in food commodities is attributed to the production of biodiesel?
The primary factors responsible for global grain price inflation are: (1) higher crude oil prices – which have more than tripled from $40/barell to $150/barell (July 2008) – leading to increased costs to farmers for fertilizer, harvest and transportation; (2) increased demand as developing countries grow and people improve their diets; (3) two years of bad weather and drought leading to poor harvests in parts of the world; and, (4) export restrictions imposed by some countries. Despite the higher energy costs, technological advances are allowing America’s family farmers to produce much more efficient harvests. Before oil and gas prices hit new highs this year, 1974 held the dubious record for highest petroleum prices. And, like today, food prices naturally increased with the higher energy costs. However, despite the fact that gasoline and diesel prices are 30 percent higher now than they were in 1974 (after adjusting for inflation) the price for grains used in most biofuels are actuall
