What’s really pumping up food prices?

According to TexasPriceCheck.com, a new Web site launched this week, the real culprit is energy prices, fueled by astronomical increases in crude oil costs.

The site, created by a coalition of Texas commodity groups, provides a number of facts, reports, research and statements from a wide variety of reputable sources indicating that rising energy costs have affected the cost of everything from farm production to food processing to getting food to the grocery store. Moreover, the rising price of commodities, while linked to growth in worldwide demand, is also affected to a great degree by energy costs.

Some interesting facts included on the site:

  • A $1 increase in the cost of a gallon of gas has two to three times the impact on food prices as a $1 increase in the price of a bushel of corn.
  • On average, farmers get about 19¢ of each retail food dollar, with the other 81¢ going to labor, energy, packaging and marketing costs.
  • The average food product travels 1500 miles by the time it gets from the farm to the grocery store, so rising diesel costs dramatically affect the final retail cost of food.
  • If gasoline had increased at the same rate as food since 2002, the cost at the pump would be $1.39 per gallon.

The site features an animated grocery conveyor belt, which allows visitors to click on food items to learn the farmer’s share of the retail price for bread, corn flakes, peanut butter and other food staples. Another animation depicts an innocent grocery cart that meets a tragic end in the “reality aisle”. A number of Texas icons such as Cadillac Ranch and a Texas license plate are featured, as well in a context related to food prices.

One page outlines the increasing cost of fertilizer for an actual Dalhart, Texas farmer, showing that in some instances, his fertilizer input costs rose by 300 percent in just one year.

The Web site is being promoted in a variety of ways across Texas. Billboards have gone up this week in Lubbock and Amarillo, with more scheduled in Austin this fall. The boards feature a grocery cart being threatened by an oil pump jack and provide the Web address for consumers to learn more. Newspaper ads in major markets are planned, as well as a radio campaign later this fall.

The consumer education initiative is being funded by the Texas Peanut Producers Board, Texas Corn Producers Board, and the Texas Wheat Producers Board.