NBC Nightly News 05-27-07 Higher gas prices causing higher food prices ANCHORS: LESTER HOLT REPORTERS: SCOTT COHN The national average for a gallon of gas this holiday weekend is $3.23. Analysts say that rising fuel prices have a ripple effect across the economy, right to your dinner table. The latest government figures show food prices in April are up almost 4 percent over last year and up 6 percent in Southern California. CNBC's Scott Cohn explains why it is costing more to feed your family. SCOTT COHN reporting: Pasadena, California, Becky Chadwick stocks up on groceries for her daughter Teryn's third birthday party... Ms. BECKY CHADWICK: Let's put this in your cart. Mine's getting kind of full. COHN: ...knowing she'll be paying more than last year. Ms. CHADWICK: It's over $100 every time you go to the grocery store with kids. So, yeah, it's definitely frustrating. COHN: And having grown up on a farm in Kansas, she says she has a good idea why. Ms. CHADWICK: It's just kind of this trickle-down effect, and unfortunately the consumers get hit the hardest. COHN: Hit because of the huge demand for ethanol, a corn-based fuel additive. Mr. BRUCE BABCOCK (Iowa State University): The number of ethanol plants is going up. The amount of ethanol that they're producing is going up. Almost all of that ethanol is produced from corn. COHN: That demand is making corn more expensive, even as farmers plant the largest corn crop since World War II. An Iowa State University study estimates the price increases has added $14 billion to America's grocery bill. It's not just corn and food sweetened with corn syrup. The price of meat, eggs and poultry has gone up because animal feed is more expensive. And if farmers are planting more corn, they're planting less wheat. That drives up the price of flour and the price of bread. According to the government, the price of a loaf of white bred up nearly 8 percent in the last year. Roast beef up 10 percent and eggs up nearly 19 percent. And demand for food and fuel around the world keeps growing. A recipe, some experts say, for a long term problem. Mr. JOSE RASCO (Merrill Lynch): I think we're going to see huge shifts in supply and demand of food products across the globe. And, you know, we're going to see some pressure on prices, we think, for the next five to 10 years. COHN: Maybe until a time when the birthday girl can go shopping on her own. Scott Cohn, NBC News, New York. HOLT: When NBC NIGHTLY NEWS continues on this Sunday, IN DEPTH, critical condition. How illegal immigrants are putting a severe strain on the nation's health care system. Later, where the rubber meets the road. Rubber sidewalks that is, giving the green movement a big bounce.