U.S. ethanol subsidies are driving up the cost of food across the grocery isle, as the price of corn has tripled despite a near-record acreage being planted. But don't believe it if your snack counter purveyor tells you it will cost more to munch popcorn during the next blockbuster movie.
"If you're talking only about the price of corn," Craig Floss, the chief executive of the Iowa Corn Promotion Board told the Tornoto Star. "The theater is justified in raising the price a half cent. But let's let them go up a whole cent. If they want to raise it a penny, that's double what they should be raising it. Anything more than that is price gouging. If they're telling you they have to raise it 50 cents or a dollar because of the price of corn, that is just not true."
At least, that's the word from the corn promotion side of the fence. Whether his economic analysis is fair and accurate or not, you can bet he's talking with the best interest of corn farmers in mind -- and the best interest of corn farmers never include inviting the public ire.
The real determinant is probably how many farmers decided to grow varieties of corn used to make popcorn, fuel, feed or food. The run up in food prices is explained by the fact that more farmers got into the suddenly lucrative fuel corn business, leaving less feed and food corn varieties available -- at a higher price. If the same can be said for popcorn, you can expect to pay more for popcorn at the movies.
Of course, given the peculiar economics of movie theater snack counters, it's a sure thing that you'll pay too much for popcorn, whether ethanol has anything to do with it or not.
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