Commenting the original article from
CNNmoney.com "A Slice of pizza gets pricier." By Allan Chernoff
Why is a slice of pizza getting pricier?
Primarily, the Rising wheat price is one factor.
Therfore that indicates that not only pizza prices are stiffing up but all food products made out of wheat will be pricy for atleast couple of months, probably until this winter. Bread, noodles, burgers... mostly what the Americans eat everyday. Bakery, Italian restaurants, fast food chains, pizza places, etc... they are surprised by the price of bag of a wheat itself. According to the Chicago Board of Trade a bushel, "60-pounds of wheat, now trades for more than $1100, more than two-and-1/2 times what it was just a year ago."
We have covered, why a slice of a pizza will be pricy. And how pricy.
Then let's go to the bottom line, why are wheat prices going up?
"You can lay part of the blame on ethanol. Huge demand for ethanol has farmers planting more corn to produce the fuel when they could be growing wheat"
Interestingly enough, the farmers learned a lesson and their plan for the winter is to go back to their original job and plant and produce more wheat so that is why we can expect normal wheat prices by this upcoming winter, atleast.
Basically, the U.S is promoting Bio-ethanol industry using corn as an alternative energy for petroleum, so the demand of corn had increase, so that the farmers changed their crop from wheat to corn, and because of this the stock farmers who fed their stocks the grains were also hit by this phenomena.
I met a person in the airplane, he said he buys wheat at the cheapest places and sells in other places at a high price. (I was sitting in a business class...)
These days... grains are not just grains, they are weapons.
I believe one of the reasons why China is growing so fast is because of this.
Remeber what Prof. Abraham Lee told us in his lecture? China is buying all the raw materials, and similarly, that is why POSCO is doing so well with their Steel industry.
It is just interesting to realize once again that all industries are so interconnected to each other.
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