The “core consumer price index” no longer includes food and energy. Even so, you may have noticed your paycheck does not go as far at the grocery store. Scott Lincicome:
According to the St. Louis Fed, food inflation was 22% between January 2006 and June 2013, while core CPI clocked in at only 15% over the same period. This divergence grew following the recession, with food prices (9%) far outpacing core CPI (5.9%) since late 2009.
Certain family staples fared even worse: over the past five years, for example, the average price of meat, poultry, fish and eggs is 16.2% higher.
Food inflation’s impact on American families is real and significant. One industry consulting firm recently estimated that between 2006 and 2012 the typical family of four paid $2,055 more per year in food bills than it would have if these costs hadn’t suddenly started trending up. […]
Policies that divert corn into your gas tank—like the Rewable Fuels Standard and ethanol subsidies—are at least partly responsible:
[T]he Congressional Budget Office concluded in 2009 that U.S. ethanol policy was responsible for up to 15% of the total increase in domestic food prices, and benefited a small cabal of farmers and biofuel producers at the expense of American families and the economy more broadly. [Cato Institute, August 12]
Those policies cost taxpayers money and they don’t even give us better gas, writes Nick Loris:
Ethanol has lower energy content than gasoline, and although fuel that is 85 percent ethanol has a lower price at the pump, when adjusting for its lower British Thermal Units, it is actually more expensive. Taxpayers have also shelled out $45 billion over a 30-year time frame for ethanol, and while the targeted tax credit for ethanol expired, subsidies remain in place for other biofuels. [The Heritage Foundation, August 13]