Earlier this week, Schwan issued a statement saying the company will be raising prices about five percent on pizza and snack products, starting August 26. This change affects brands like Red Baron, Freschetta, Tony's, and Wolfgang Puck All Natural pizzas, Asian Sensations snacks and appetizers, and Larry's potatoes. The reason for the hike is more crops diverted to ethanol production, as well as increased health care and transportation costs, Schwan said.
So EPIC grabbed a fresh press release form and responded with these words:
Numerous studies have shown that rising energy costs have a significantly greater impact on food prices than a rise in corn prices. A 33 percent rise in crude oil prices which translates into a $1.00 per gallon increase in the price of regular unleaded gasoline, results in a 0.6 to 0.9 percent rise in the Consumer Price Index for food. An increase of $1.00 for a bushel of corn would cause the CPI for food to increase by only 0.3 percent.
Increased labor, packaging and transportation costs all play a role in rising food prices. In 2007, growers expect to plant over 90 million corn acres. This is expected to be the largest crop in over 60 years. And once again, U.S. farmers will meet the challenge of a diversified market: food, exports and energy.
EPIC's executive director, Tom Slunecka, said "The ethanol industry has become a convenient scapegoat for corporate America to justify price increases to maintain profits. The debate over rising food prices has bordered on the ludicrous; the facts are conveniently omitted from this argument."
Maybe ethanol is pretty responsible for this increase. Maybe not. But note that Schwan also cites higher transportation costs as a reason. Somehow or other, pretty much everything is affected by greener driving.
[Source: EPIC, Minneapolis / St. Paul Business Journal]