WATERLOO -- Apparently people can't have their corn bread and eat it too.

Corn-based ethanol is dubbed a savior by politicians and renewable energy advocates. The intent is to keep gas prices down, help the environment, improve corn prices and lessen the country's dependence on foreign oil.

But the booming ethanol industry is expected to gobble up 50 percent more corn this year to feed hungry ethanol plants, competing with the food sector. The unintended consequence, experts say, will be higher grocery bills. Economists and food industry experts believe consumers will feel the pinch when purchasing everything from Iowa chops and eggs to Mountain Dew.

People don't eat the kind of corn that makes ethanol, livestock does. But it is made into high fructose corn syrup, oil and starch that go into myriad products from soft drinks to baby powder.

Products in which corn is the largest input cost will go up in price the most, experts said. That includes pork, poultry, beef, eggs and milk. Other consumables that contain corn are bound to inch higher in price as well.

"Eggs leveled off recently, but really took a steep jump," said Dave Bowling, assistant store director at the University Avenue Hy-Vee. "What do chickens eat? Corn. It all trickles down."

Bowling said eggs usually jump in price due to demand as Easter nears, but not like this year. Government statistics indicate Iowa egg producers averaged 67 to 76 cents per dozen for large eggs in mid-March, 20 cents higher than a year ago. That'before the mark-up by wholesalers and retailers.

Estimates on how much prices will jump vary widely. The Iowa Corn Growers Association thinks bumps will be minimal, pennies on the dollar. Grocers, nonprofit consumer groups, economists and the government aren't as optimistic. They estimate anywhere from 2 percent hikes to more than 20 percent for some items.

Farmers are enjoying decade-high corn prices thanks to ethanol. Cash bids are nearing $4 per bushel at local elevators, while farmers barely earned $1.50 per bushel during the harvest of 2006. Increased demand for ethanol due to the ban of toxic fuel additive MTBE and strong exports are expected to prop up prices for years to come.

Predictions corn demand this year will outpace supply possibly by a billion bushels have processors worried. Agriculture experts expect farmers to grow more than 12 billion bushels of corn this year, up from 10.5 billion in 2006.

"Even with that increase, we think production will fall short of demand," said Keith Collins, the U.S. Department of Agriculture's chief economist, in a recent Associated Press story.

More than 3 billion bushels of corn are expected to go into ethanol this year, up from 1.4 billion in 2005. Ethanol production is expected to double 2005's output of 3.9 billion gallons in a couple of years.

Iowa has 26 ethanol refineries, with another 21 under construction or being expanded, according to the Iowa Renewable Fuels Association.

The long-term consequences aren't lost on the grocery industry. Bowling said managers at University Hy-Vee are discussing the situation and preparing for an onslaught of questions from customers that's sure to come as prices increase.

"We haven't heard comments yet, but when we do we can say this is why. Corn prices are up, and cows eat corn," Bowling said.

Bruce Babcock, professor of economics and director of the Center for Agricultural and Rural Development, thinks meat will increase 2 percent to 7 percent, with beef at the lower end of the spectrum since cattle can graze and eat dried distillers' grains -- a byproduct of ethanol production -- and pork on the top end.

A hog's diet is mostly corn and soybean meal. Increased production costs will inevitably force some pork producers out of business, Babcock predicts. Less product means more demand and higher prices.

"We'll have to have less pork production to cover the feed costs," Babcock said.

The Earth Policy Institute based in Washington, D.C., an advocacy group touting an environmentally sustainable economy, thinks too much grain is being diverted to fuel cars. The institute, citing the USDA, says the wholesale price of chicken will increase 10 percent this year, eggs will go up 21 percent and milk will be 14 percent higher than in 2006.

EPI President Lester Brown thinks the United States' push for ethanol is creating chaos in world grain markets. He said raising auto fuel efficiency standards 20 percent would reduce oil used as much as converting the entire U.S. corn harvest into ethanol.

"The food and energy economies, historically separate, are now merging," Brown writes. "In this new economy, if the fuel value of grain exceeds its food value, the market will move it into the energy economy. As the price of oil climbs so will the price of food."

The Iowa Corn Growers Association believes the food vs. fuel debate is being blown out of proportion. Association spokeswoman Mindy Williamson said the average family will only spend $10 more a year on groceries because corn prices have doubled.

For example, she said at $4 per bushel, a box of Corn Flakes has less than 10 cents worth of corn.

"There's little to no correlation between farm gate prices to retail," Williamson said. "A lot of people are speculating what will happen. I think people are a little more worried than in the past because corn is up front and center with ethanol production."

Several shoppers last month at the University Avenue Hy-Vee said they haven't connected the dots between ethanol, high field corn prices and their grocery bills. When prices do start going up, consumers said, it will most likely change their shopping habits.

Carmen MacDonald, 44, of Waterloo said she hasn't bought soda for more than a month because of the lack of sales. Bowling said retail pop prices haven't noticeably jumped yet, but margins are narrowing to the point that sales aren't as common.

"I probably will look for sales … that's what I do now," MacDonald said. "I would say that I (would) buy less meat. I don't know that I (would) buy less dairy."

Cory Newell, 35, of Waterloo shops on a strict budget. He said spikes in staple items like meat and milk would hurt.

"That's part of life. Everything goes up," Newell said. "That's the law of supply and demand. … I guess it's just something that we have to deal with."

The growing disconnect between consumers and agriculture is why most people don't realize the impact $4 per bushel corn can have on their pocketbook. Agronomy experts say that's even true in Iowa, the No. 1 corn producing state.

Since the whole kernel corn people eat -- cob, bag or can -- hasn't shot up yet, and grocers say it likely won't, people don't make the connection. Roger Elmore, ISU Extension corn specialist, said many people don't know the difference between field corn, which is processed and used to feed livestock, and the sweet corn people eat.

Throughout the years corn was bred for different purposes. Field, or dent corn, is more vigorous, hardy, produces high yields and is nutritionally better for livestock.

Sweet corn kernels, on the other hand, have a higher sugar content and a more pleasing taste to humans. The plants are shorter, tassels are different and the growing season is shorter to keep the kernels tender.

"Vegetable corn is a sweet version of corn lines. There's a lot of breeding that went on, with two different objectives," Elmore said.

Jerry Fleagle, president of the Iowa Grocery Industry Association, said it is a general consensus among members that high corn prices will have a ripple affect at retailers. Eventually, higher costs will be passed down, but he thinks it will be minimal and isolated to certain products, like meat.

"It won't break anybody, but it could make things a little more snug," said Fleagle, a former Waterloo-Cedar Falls area grocer.

Contact Matthew Wilde at (319) 291-1579 or matt.wilde@wcfcourier.com.