Reason(s) behind rising food prices?

What determines the price of the food you buy? Is it commodity prices, corn ethanol, cattle markets, worker wages or oil prices?

It’s always interesting when media folks start pointing the finger specifically at commodities prices and ethanol production for rising food costs when in all reality, they play such a small role in the total food dollar. Arguments like Food vs. Fuel from ethanol opponents is something most people have probably heard or read about. While the ethanol industry has put this issue to bed time and time again, it will most likely never completely go away.

“It’s ironic that the food versus fuel campaign by the oil companies has been proven wrong time and time again,” added Duffy. “The biggest factor in rising food prices is oil.”

Oil prices have risen dramatically over the past couple of months and with America’s massive dependence on oil it affects the price of nearly everything including food.

The chart below offers a complete breakdown of the U.S. food dollar:

When it’s broken down, it’s difficult to understand how people try to blame commodities as less than 12% of the U.S. food dollars goes back to the origins of the food, the farm.