By TIM THORNBERRY
Kentucky Correspondent

FRANKFORT, Ky. — The summer season is traditionally the most popular time for grilling and cookouts, but the price of doing so has increased and may reach record highs, according to industry experts.

The Kentucky Farm Bureau conducts food price surveys throughout the year. The first quarter of the year here did not see drastic increases at least at the retail end. The survey indicated the total cost of 40 basic grocery items was $103.62 – down by $1.66, or approximately 1.6 percent, from the same list of items reported in the fourth quarter of 2009.

The review also reported that the beef category showed the greatest total decline with an average price drop of 9.5 percent however, certain beef items such as ground beef and chuck roast showed increases from Jan. to April.

That was then and this is now, however. The second quarter was a different story. The most recent KFB survey indicates that retail food prices in supermarkets across the state saw a significant increase over the last three months.

The overall results of the survey showed the total cost of the same 40 basic grocery items surveyed in the first quarter was $108.48 – up by $4.86, or approximately 4.7 percent. Six food groups were recorded in the survey – beef, dairy, fruits and vegetables, grain, pork, and poultry – with the beef category showing the greatest total jump with an average price increase of 13 percent.

There are many reasons for the meat increases, seasonal demand being one of them. But does the federal mandate to use much of the nation’s corn crop for the production of ethanol have anything to do with it?

The National Corn Growers Assoc. reports that 2.3 billion bushels of the 2007 corn crop were used to produce 6.5 billion gallons of renewable fuel. Currently, close to a third of the nation’s corn goes toward ethanol production.

Kentucky ag organizations and some producers believe the cause of rising meat prices is likely a combination of reasons.

Corrine Kephart, president of the Kentucky Cattlemen’s’ Assoc. said she feels the rise in beef prices comes from a couple of summers of bad weather and a down economy.

“I think the reason the cost of beef is going up right now is simple supply and demand,” she said. “You look at the fact that two or three years ago we started into a drought. Different parts of the Western United States have been in drought conditions for several years running and the size of the cowherd has been shrinking. Folks have had to disperse their cows because they can’t feed them. It doesn’t have as much to do with ethanol as it has to do with a lack of forage resources.”

Kephart also said she felt like the situation was more about speculators in the market who are just trading contracts.

“If you look back when corn and beans that went through the roof a few years ago, a lot of that was driven up just by the speculators. That was when the talk of ethanol got hot and heavy and more plants were being built so they started buying and trading contracts,” she said. “That drove the prices up artificially and had nothing to do with the amount of corn on hand or was expected to be harvested that year.”

Bernard Peterson grows corn in south central Kentucky and said while the cost of corn was too high for livestock producers to make money a couple of years ago, ethanol production is not the only problem.

“A whole lot of that was corn went up too fast and the meat market lagged behind,” he said. “I think we are doing better now as far as the ratio of corn prices to meat prices. The consumer complaining about ethanol making their food high is bull. My opinion on ethanol for a long-term solution to the world’s energy crisis is, I don’t hardly think it’s the right answer.

But using corn for ethanol is another matter. “Do I like it, you’re darn right I like it,” said Peterson. “It’s helping my bottom line. In support of the American farmer, the ethanol industry said how many billions of bushels of corn they wanted and what did the American farmer do, he produced it. Somebody said you couldn’t do it again; he did it again. We are good at what we do. Not to brag, but damnit, we are. We keep finding a way to produce a better crop, a bigger crop and getting more corn acres in the ground.”

That’s good for corn growers, and perhaps more corn will keep prices at a level that satisfy all interested parties.

The most recent crop report from the Kentucky Field Office of USDA’s National Agricultural Statistics Service (NASS) indicated that Kentucky producers increased their acreage planted to corn for 2010 by 100,000 acres or an estimated 1.32 million acres.

Harvested for grain acreage was estimated at 1.21 million acres, up 60,000 from last year.

The increase serves as no small feat since a portion of the state’s crop had to be replanted because of flooding that occurred last May.

The trend also follows an increase on the national level. U.S. corn planted for all purposes was estimated at 87.9 million acres, up two percent from last year. Growers expect to harvest 81.0 million acres for grain, also up two percent from last year according to the NASS.