Corn finds itself in increasing demand as ethanol production increases. This is one of the factors that is raising the price of corn on the market. The result is an increase in the cost of HFCS which will trickle down to increase the cost of sodas, meat (livestock producers are the largest corn customers), processed foods in general, and even ketchup!

The sweetener accounts for about 10% of the cost of goods for Coca-Cola Enterprises Inc. and Pepsi Bottling Group Inc., Coke and Pepsi’s largest bottlers, respectively. Rising corn prices could also affect Coke and Pepsi themselves, though to a lesser extent, according to Mr. Pecoriello. Corn syrup accounts for as much as 3.5% of Coke’s global cost of goods sold.

Corn, used in PepsiCo’s Frito-Lay snacks, and in the syrup used in Gatorade and Pepsi’s fountain-drink business, make up about 2% of its global cost of goods sold. In an interview yesterday, food processor General Mills Inc. CEO Stephen W. Sanger said the increased demand for corn would likely cause a spike in the price of other commodities as farmers devote more acreage to corn.