Rising Consumer Price Index Confirms Inflation

May 21, 2014

The Consumer Price Index tracks how much inflation Americans are experiencing in a given month or year. According to the most recent release, consumer prices in April crept up by the largest percentage since last summer, driven by higher costs for gasoline, shelter and food.

While we can’t speak much to shelter, higher gasoline and food prices are something we know a bit about.

Earlier this year, the price of ethanol soared above gasoline prices, and each year, more and more corn is diverted away from animal feed and our food supply and into our fuel. The UN stated in a report that the cost of corn, wheat, rice and soybeans could go up as much as 20 percent thanks to biofuels mandates. Beyond just our grain supplies, the Bureau of Labor Statistics said the cost of meat, poultry, fish and eggs is up 6.4 percent since 2013.

The chart above shows just how much inflation has gone up since the ethanol mandate was put into effect in 2005—38 percent overall and 17.8 percent for food. That, of course, isn’t entirely due to the ethanol mandate, but there’s no doubt the EPA’s proposal to roll back the mandate would be a win for consumers at the grocery store.