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Popcorn prices explode by 40%

Demand for ethanol fuels rise

Americans eat 4 billion gallons of popcorn a year, or 13 1/2 gallons per person. Americans eat 4 billion gallons of popcorn a year, or 13 1/2 gallons per person. (Otto Greule Jr./Getty Images)

WASHINGTON -- US popcorn prices have risen more than 40 percent since 2006 as soaring demand for feed corn to fuel the ethanol boom has spilled over into the favorite snack of American moviegoers.

Companies that purchase popcorn each year, as opposed to larger crops such as corn and soybeans, are confined to choosing among a relatively small number of suppliers. This makes it important for popcorn companies to offer competitive prices and forge good relationships with farmers.

"I think [ethanol is] going to have a uniform effect on all geographical areas that produce popcorn," said Dennis Kunnemann, president of AK Acres Popcorn, which buys, processes, and then sells popcorn to distributors, packagers, and snack-food retailers.

"This year, we've paid the highest price ever that I've contracted for, 13 cents a pound," compared with 9 cents per pound last year, Kunnemann added.

The family-owned company in Imperial, Neb., has passed its cost on to customers by signing new contracts for between 18 and 20 cents a pound, up about 40 percent from 2006.

AK Acres also has helped in the ethanol boom by selling land next to its facility for the construction of an ethanol plant slated to begin this year.

Americans consume 4 billion gallons of popcorn annually, totaling 13.5 gallons per person, according to the Popcorn Board, which promotes the industry. An estimated 70 percent of the snack food is consumed in homes, with the remaining 30 percent eaten at theaters, stadiums, and schools.