Higher corn prices raising farming and food costs - KWWL - Eastern Iowa Breaking News, Weather, Closings

Higher corn prices raising farming and food costs

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DUBUQUE COUNTY (KWWL) -- We've all noticed it, but the Labor Department released official numbers today: Food prices jumped 1.5% last month alone. The cost of eggs soared by 43.7%, the largest monthly gain in the past 17 years. Beef, pork and vegetable prices also rose sharply.

For all of those things, the price of corn is linked to increases, especially at the meat counter. It's a ripple effect -- corn as we know is used for food, feed and industry.

"That has an immediate effect on the livestock industry because the feeder has to buy his grain and it costs more for the product," Dubuque County Farm Bureau president Paul Vaassen said.

Vaassen is a cow/calf farmer. With increasing costs, it's a tough time to be in livestock.

"Some people say, why should we fool around with livestock, we'll just grow the corn and soybeans and let it go," Vaassen said.

The high cost is part of the reason Vaassen has always seperated himself from buying corn; he grows all the feed he needs on his own land. Though with high fertilizer and seed costs, it's still expensive.

Vaasser says the cost of beef at the grocery store doesn't coorelate with the cattle market as much as you might think. That's because it's not just the feed driving up prices; other costs are increasing too.

"There's the processing of the meat, and the shipping, and the refridgeration, and all of those things that are added into the costs and those people along the way are in it to make a profit as well."

Even though economists say rising feed costs will make higher market prices for meat, farmers say they're not making all of that money back on livestock sales.

"When we sell these products, we cannot establish a price. We cannot say, we want a dollar a pound for our finished cattle. We get what the packer pays," Vaassen said.

Now, Vaassen is waiting to see where the market stands now with his latest sales.

"I'll find out saturday when I get the check!"

Here's an example of the direct impact corn prices have on other food prices, according to an Iowa State University study.

If the price of corn increases by 30%, hen the price of eggs would increase by 8%, poultry by 5%, pork by 4.5%, beef by 4%, and milk by almost 3%. According to the study, overall, food prices should increase by 1% if the price of corn increases 30%.

Online Reporter:  Jamie Grey

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