Popcorn price insanity, spaghetti shock, beer outrage, tortilla riots – blame ethanol

Kicked up demand for ethanol is significantly kicking up the price of popcorn - to the tune of over 40% since last year in some places across the country. And pasta, tortillas and other grain-based products are feeling the pinch too.

The blame for the increase is placed squarely on the move to use Ethanol as a more environmentally friendly fuel, experts say. And the increase is only going to get worse as the U.S. Senate recently passed legislation that would overhaul car fuel economy standards and quadruple the use of alternative fuels. President George Bush said he wants the US to boost the use of alternative fuels by requiring 36 billion gallons of ethanol and other biofuels by 2022.Since Americans consume 54 quarts of popcorn per man, woman and child each year, (according to the Popcorn Board), this news cannot be good.

The board says an estimated 70% of popcorn is eaten at home, with the remaining 30% eaten at theaters, stadiums and schools. Most of the world's popcorn is grown in the United States.

According to a Reuters story, American Pop Corn, which makes Jolly Time Pop Corn, the 90-year-old company has increased the price tag for bulk items 20% from a year ago, and smaller bags between 1 and 4 lbs were increased 10% in June. The increase has helped buffer a 63% jump in the price it now pays for seed.

US corn prices have risen to $3.38 per bushel from around $2.40 per bushel at the same time in 2006. This year alone, ethanol is forecast to consume 27% of the 12.5 billion-bushel U.S. corn crop, the U.S. Agriculture Department has estimated. That compares with 21% of last year's 10.5 billion-bushel corn crop going to ethanol.U.S. ethanol output is on track to double to more than 12 billion gallons a year by the end of this decade.

There are 117 distilleries in operation now in the United States with annual capacity of 6 billion gallons. And it's not just popcprn, biofuels are causing prices to go up on a variety of items across the globe. A barley shortage in 2006 raised the wholesale price of German beer this May. Lobbyists connected with the brewing industry claim the trend toward biofuels in Europe has also cut into the German barley harvest.

A spike in the price of corn tortillas last January drove thousands of poor Mexicans to protest in the streets, and observers said the increase was caused by a huge demand for corn as a biofuel in the United States.

Now German brewers have announced that a surge in the price of barley - in part, they say, because of biofuel crops - will push up the traditionally low price of German beer. And Italians are grumbling because Canadian farmers are diverting wheat crops to bio-fuel production and not into making pasta. In Mexico, the rise in American corn prices has caused a spike in the tortilla prices that has the poor in that country on edge.