Fried catfish and corn on the cob

If policy makers continue to address the "energy crisis" I won't be able to afford either:

Corn and soybeans have nearly tripled in price in the last two years, for many reasons: harvest shortfalls, increasing demand by the Asian middle class, government mandates for corn to produce ethanol and, most recently, the flooding in the Midwest.

This is creating a bonanza for corn and soybean farmers but is wreaking havoc on consumers, who are seeing price spikes in the grocery store and in restaurants. Hog and chicken producers as well as cattle ranchers, all of whom depend on grain for feed, are being severely squeezed.

Perhaps nowhere has the rise in crop prices caused more convulsions than in the Mississippi Delta, the hub of the nation’s catfish industry. This is a hard-luck, poverty-plagued region, and raising catfish in artificial ponds was one of the few mainstays.

Then the economics went awry. Feed is now more than half the total cost of raising catfish, compared with a third of the cost of beef and pork production, according to a Mississippi State analysis. That makes catfish more vulnerable. But if the commodities continue to rocket up — and some analysts believe they will — other industries will fall victim as well.

...

“The industry is going to implode,” [Consolidated Catfish President] Mr. Stevens said. He blamed the government’s ethanol mandates for making fuel compete with food for the harvest of the nation’s farmland. “Politicians were in a rush to do something, and it became a terrible snowball.”

There is lots of economics teaching examples in the rest of the story: shut down decision, international trade, marketing tastes and preferences, elasticity.

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[Bob Murphy]

Why are you worried? Eat Less!