The Commerce Department reported this week that demand for durable goods dropped by 0.3 percent last month. Meanwhile, sales of new homes plunged 8.5 percent in March to their lowest level in nearly 17 years. And, gasoline soared to record highs this week with the national average price topping $3.55 per gallon.
Economists and policy makers alike blame the sharp run up in energy costs for a commensurate spike in food prices. But critics of biofuels, like ethanol, claim increased demand for corn also is a factor, and is at least partially the reason for severe food shortages in some parts of the globe.
But the staple in much of the world where food is the scarcest is NOT corn. It's rice. And tight global supplies prompted two American retailers this week to ration U.S. rice purchases.
Rice, the staple starch for most of the world, has experienced record increases in pricing. Data released by the United Nation's Food and Agriculture Organization shows the export price for rice has doubled in the past year. And this week, rice futures on the Chicago Board of Trade reached record levels under pressure from what investors are calling dwindling world supplies.
To keep prices from going out of control where rice is a more common foodstuff, government officials in China, India, and Viet Nam have restricted rice exports. Fallout from the move now is hitting the United States.
The debate over the cause of record food prices rages on. While alternative fuels makers and supporters do acknowledge biofuels have some impact on the price of food, they were some of the first to point out other factors also responsible for record price increases. Even as a few critics continue to place blame directly on the back of biofuels, previously ignored reasons are getting more attention. The list of factors now includes growing Asian demand, record oil prices, and market speculation.
The debate has served to anger many in the halls of the U.S. Congress including farm state lawmaker Republican Senator Charles Grassley of Iowa.
Sen. Charles Grassley, R-Iowa: "The high price of rice is the reason for rioting in Thailand. We don't make ethanol out of rice. So we have everybody focusing on corn and ethanol without looking at all the other reason the food is high..."