Food cost: up, up, and...up?

These days whenever I go grocery shopping, I always come out thinking about how things used to be cheaper. The first time I really started paying attention to my grocery bill was during my second year of college (four years ago). That is only because I was on a meal plan my first year, meaning I didn't need to cook (I couldn't even if I wanted to since I didn't have access to a proper kitchen). To further illustrate, look at how much the price of these food has gone up in the past year alone:

-eggs up 43.9%

-milk up 21.3%

-meat up 6.4%

-poultry up 7.2%

So, why? After deducting inflation from the equation, the rising food price phenomenon can be directly accounted for by the law of supple and demand. To illustrate, countries like China (whose economy has been growing at a ferocious rate) are competing for the same commodities in the global market as the U.S. These commodities include food and energy. The U.S. is a major supplier of food but not of energy. This translates to rising food cost and soaring energy price.  Did I mention how soaring energy price directly contribute to rising food cost since the cost of transporting food is increased? The saying that oil is king is not an understatement. 

What can the U.S. do to become more self-sufficient? In comes ethanol...made from corn that is. 

It seemed like the perfect solution.  Instead of paying other countries for oil, we can pay our own farmers to make ethanol from corn. Moreover, burning corn-derived ethanol is a lot better for the environment. What a perfect way to kill two birds with one stone!

If only that was the case. Since we are paying our farmers more to use corn for ethanol, we are left with less corn for our own consumption. Not to mention all the corn-derived products including corn syrup and corn oil. Moreover, farmers frequently use corn to feed their livestock...well they used to anyways. To further poke holes at the rosy picture, corn-derived ethanol is not as efficient as crude oil. Although I am certain the energy efficiency will continue to improve with further research, I really doubt we will reach the point where all of our oil will come from plant. 

For now, this is a lose-lose situation. With time, in the best case scenario, our farmers will plant more corn to boost supply and our corn-derived ethanol will be a lot more energy efficient. Otherwise, the exorbitant prices will be unbearable, people will protest and government will probably have to subsidize the cost of food or energy.