When I began reporting on the ethanol industry a couple of years ago, many economists repeated the same warning: the U.S. is trading food for fuel. They feared corn-based ethanol would demand so much of the U.S. corn crop that there might not be enough of the grain to feed the world. That prediction, in part, may be coming true. It also seems to be coming true a lot sooner than anyone expected.

We haven't run short of food yet, but it is getting increasingly expensive. At $5.00 a bushel, corn is roughly double what it was a year ago. Since demand for corn is so strong, farmers have planted fewer acres of soybeans and wheat. Their prices are even higher than corn.

The higher grain prices are already rippling through our food chain. This week Pilgrims Pride announced it was closing a chicken processing plant and six distribution centers. The reason? Grain to feed chickens is just too expensive. Smithfield Foods cited the same reason for plans to liquidate up to 25,000 hogs. Obviously, fewer hogs and chickens means costlier pork chops and drumsticks.

Two companies that I spoke to for my food inflation piece have been forced in the past year to raise prices and are doing so again. Chicago's Alpha Baking raised prices this week for the third time in twelve months. And, ConAgra says it will impose a price increase north of 5% on most of its products later this month.

To be fair, ethanol demand isn't the only influence here. A weak dollar is driving up demand for all commodities. Some experts also say commodity funds have been driving up prices by pouring billions of dollars into grains, energy, and metals.

But, experts point to ethanol as perhaps the primary reason grain costs are so high. And, it appears they will only go higher. President Bush is calling for ethanol to replace 35 billion gallons of gasoline within the next decade. Last year the U.S. produced 6.2 billion gallons, so we'll need to produce a lot more corn to fill our cars and our stomachs.

Agriculture experts say unless we find a way to produce ethanol from something other than corn, we can't possibly reach that goal without starving a lot of people. Dan Basse is President of the economics forecasting firm, AgResource Company. He says the U.S. must either back off of its ethanol mandate or allow farmers to plant corn on roughly 36 million acres of conservation land. Since neither of those options is on the table now, it looks like we'll have to brace ourselves for even higher food prices.