Domestic fuel prices increase dramatically

A Department of Labor report will probably add fuel, so to speak, to the continuing discussion over the effect that biofuels growth has on food prices. The new data released April 16 showed that domestic food prices rose 5.1% in just the first three months of this year.

      Economists surveyed by Dow Jones Newswires were forecasting that the Labor Department's report would show the consumer price index increased at a rate of 4% annually through March 2008, compared to the 2.8% rise over all of 2007.

     The Labor Department's producer price index for finished goods, released April 15, showed a 1% increase on a seasonally adjusted basis – about twice what economists had expected. Food prices rose 1.2% in March, after falling 0.5% the previous month.

     Work by the Washington D.C.-based International Food Policy Research Institute suggests that biofuel production accounts for a quarter to a third of the recent increase in global commodity prices.

     With gasoline prices steadily rising, people are more anxious than ever to find an alternative. However, if it starts costing people at the grocery store, is there really a difference in the minds of consumers? Most people could find a way to cut back on driving, but eating might be another story.

Comments

[Hersh]

Very interesting and informative. I am looking into "Biofeedstocks", vs. "Biofuels". I am of the opinion that the use of bio-carbon as feedstocks is potentially better (greater value add) than as bio-fuel. I wonder what you think of that.

Great blog!