As grocery bills continue to rise, some consumers may think that the price of corn is causing the higher food prices. But, according to Mike Plumer, University of Illinois Extension natural resources educator, other factors including labor and fuel costs have a larger impact on food prices.

"A $3 box of corn flakes (15 oz.) currently only contains around 8 cents of corn based on what the farmer receives," says Plumer. "So if the price of corn only affects the price of corn flakes by a few cents, why are we paying so much more at the grocery store?"

Jason Henderson wrote in The Main Street Economist, an analyst publication of the Federal Reserve Bank of Kansas City, that currently 80 percent of the cost of food is due to labor and energy costs, which recently have significantly increased. The publication also states that corn farmers only receive about 4 percent of the food dollar when it comes to corn flakes.

In a study released in April, Texas A&M University states that "higher corn prices have very little effect on consumer food prices." Ephraim Liebtag from the U.S. Department of Agriculture says their studies have shown that higher corn prices affect retail food prices at less than 10 percent of the change in the price of corn.

The recently released study by John M. Urbanchuk, of Laidlaw Energy Group, states that a $1 per gallon increase in the price of gasoline has three times the impact on food prices as does a $1 increase in the price of corn.

Plumer offers this comparison: In 1949, the price of corn was $1.24 per bushel and oil was $2.54 per barrel. Today, the local corn price is $5.60 while oil has increased to $121+ per barrel.

The U.S. Department of Labor just released some figures on cost increases from March 2007 to March 2008. Food went up 4.5 percent, transportation costs increased 8.2 percent, motor fuel increased 26.4 percent, and fuel oil increased a big 40.2 percent.

"Corn farmers only increased the cost of corn flakes by around 3 cents a box, or about 1 percent," says Plumer. "Wouldn't it be nice if everyone else held down their costs to that level?"