Corn falls in lock step with oil
An oil well sits in the middle of a corn field near New Haven, Illinois
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Scott Jagow: One nice thing, I guess, about the economic downturn is that prices are falling. Oil is at $62 a barrel this morning. We haven't seen that in 18 months. And the price of food -- corn in particular -- is crashing as well. Here's Steve Henn with more.
Steve Henn: In the era of ethanol, corn isn't just a food -- it's a transportation fuel that tracks the price of oil.
Bruce Babcock's an agricultural economist at Iowa State University:
Bruce Babcock: Corn has fallen in almost lock step with the price of crude oil.
When oil was up around a $150 a barrel, a bushel of corn cost $7.50. Now, it's less than half that.
Corinne Alexander: This certainly is a very good news for developing countries were they eat a lot of corn and they're importing a lot of corn from the U.S.
Corinne Alexander is an economist at Purdue. She says U.S. consumers may not see prices drop in grocery stores so quickly. Babcock agrees.
Babcock: There's a significant lag into supermarket prices.
Grain prices are just a small part of the cost of most processed foods in the U.S. And high prices for grains this summer may mean U.S. meat prices will continue to rise through Christmas.
In Washington, I'm Steve Henn for Marketplace.