Popcorn prices popping thanks to ethanol boom

By Christopher Doering

WASHINGTON (Reuters) - A trip to the local Cineplex may become even pricier soon thanks to surging popcorn costs.

U.S. 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 movie-goers.

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 lb last year, Kunnemann added.

The family-owned company in Imperial, Nebraska, has passed its increased cost on to customers by signing new contracts for between 18 and 20 cents a lb, 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 later 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.