Residents in the Cayman Islands are already paying higher food prices as a result of the increasing cost of corn, which has been fuelled by a higher demand for the production of ethanol.
Woody Foster, managing director of Foster’s Food Fair, reported that the retail price of medium eggs more than doubled in about six weeks. On 11 December 2006 medium eggs were $1.07 per dozen and on 30 January 2007 they were $2.19 per dozen. Large eggs went from $1.27 on 11 December per dozen to $2.39 on 30 January.
Chicken prices are also up eight to 10 per cent since December, Foster’s reported. And while the price of chicken at Kirk Supermarket and Pharmacy has not yet risen, Assistant Manager John Shirley said it will.
‘We’re being told we will see an increase in poultry prices,’ he said. ‘[The supplier] won’t give a date; only that there is an increase coming.’
The reason for the increase is the rise in the price of corn in the United States because of the demand to produce ethanol as an alternative fuel. The US Government is encouraging ethanol production to reduce its reliance on foreign oil.
In his State of the Union Address last month, US President George W. Bush said he wants to increase mandatory alternative fuel production to 35 billion gallons by 2017, about seven times the amount produced in 2006.
The ethanol industry is in turn gobbling up corn supplies, driving prices to a 10-year high at nearly US$4 per bushel.
Not only do higher corn prices drive up the price of corn and goods made with corn – which includes things like corn chips, tortillas and soft drinks with high fructose corn syrup – but it also drives up the cost of feed for animals.
Corn is the primary ingredient of chicken feed, and according to the National Chicken Council in Washington, DC, there is really no alternative.
‘No other grain is produced in sufficient quantity to be a substitute and no other grain is as suitable for poultry feed,’ said NCC Director of Communications Richard Lobb in response to questions from the Caymanian Compass. ‘Cattle, having three stomachs, can eat almost anything, but chickens really prefer corn and don’t do as well on feed that includes wheat or other grains.’
In addition, Mr. Lobb said chickens that are used for meat and chickens that are used for laying eggs both need a lot of energy.
‘Corn provides an ideal nutritional package,’ he said.
In addition to rising prices in chicken and eggs, high-end corn-fed beef, like Omaha Steaks, is also affected.
Last week, U.S.-based Tyson Foods Inc., one of the world’s largest meat processors and marketers, warned of the effects of corn prices on the cost of its products.
‘…the dramatic rise in corn prices has become a major issue for us and others in the food industry,’ said Tyson Chairman and Chief Executive Richard L. Bond in a press release that announced the company’s quarterly financial results. ‘Companies will be forced to pass along rising costs to their customers, meaning consumers will pay significantly more for food.’
The rising corn prices are having an affect all over the region. News reports out of the Bahamas noted the rising price of eggs; Jamaica has recently noted a rise in the cost of chickens; and thousands of Mexicans protested the rising cost of tortillas, a staple in that country, which have doubled in price over the past year.