We have put signs in our stores to tell as many customers as possible about the reasons for the dramatic increase in bird seed prices. As a retailer we hope our customers understand. No one likes higher prices but maybe they are a little more palatable if we understand the reason for the increases.

The government recently started programs to spur the growth of alternative fuel sources. They offered a $1 tax credit to companies for each gallon of ethanol or bio-diesel they produce. The government has created a guaranteed market and a tax credit for growing corn for ethanol. Of course many farmers started growing corn instead of sunflower and other grain crops. About the same time Frito-Lay, a huge consumer of cooking oil, decided to switch from corn oil to sunflower oil. Suddenly there was more demand but a smaller supply of sunflower. As a result the price of sunflower climbed to record highs.

This same problem has affected the price of many food items. Beef is higher because cattle are fed corn on the feed lots and flour has more than doubled in cost because farmers are growing less wheat. The ripple effect is far reaching. The markets will adjust to balance the supply / demand problems but it will take time.

On the bright side, we recently noticed that Frito-Lay has changed the ingredient list on many products again. They now indicate their use of sunflower oil and/or corn oil. We suspect that some farmers will move back to sunflower production since the price is higher but only time will tell how much effect this will have on market prices.

The Bird Watcher