article in the Chicago Tribune highlights the trend;
“The situation with flour is related to worries that the supply of specialty flour is vulnerable because farmers are choosing to grow corn and other crops, the American Bakers Association said. Flour prices are up significantly because the cost of wheat has increased, and the association said it has received reports that supplies of certain rye flour will be exhausted by July…
…" bakers have been hit hard in the last few years by escalating prices for eggs, milk, butter, shortening, sugar and flour. "The core reason for the increase is the price of corn and corn-based ethanol, which we morally object to," Jarosch said. "It's right up there with burning your food to heat your house."
The tendency is to think that food chain is a static model. The cost of wheat is determined solely by demand for wheat. The macroeconomic case study that restaurateurs are now a major participant in, is that price of wheat, milk, meat, etc, is depended on the price of corn and other staples. The interconnection of all elements has created the situation that we have today. There is more demand for meat, which creates more demand for corn, which is already in high demand because of the growing use of ethanol, which encourages farmers to plant more corn instead of wheat, which raises the price of wheat, which is already high because of the weak dollar, which…you get the idea.
