Eight dollar corn appears to be the new normal, and even though much of that corn hasn't made its way into the food chain yet to feed cattle, pigs and chickens, retail food prices are already rising.
The USDA reported sharp hikes in retail prices in July compared to a year ago. Steak is up almost 15 percent, whole chickens up 16 percent, ham up 8 percent, and cheddar cheese is up 13 percent.
How much of those prices can be directly attributed to the price of corn? How much corn goes into them?
I asked a cattleman, two dairy farmers, a hog farmer and a couple of egg producers the following: How much corn is needed to feed a single animal over its lifespan, and how much product do you get from that animal?
The result varies from species to species, animal to animal, but the bottom line is the cost of corn accounts for about 10 percent of the average retail price for a high protein morning breakfast of steak, eggs, bacon and milk. (Read More: Massive US Drought Leads to Worst Fears for Corn Crop.)
Here’s the math.
STEAK
Your average steer will be fed 20 pounds of corn a day for 160 days after leaving rangeland for the feedlot. That's 3,200 pounds of corn.
When that steer is slaughtered, it will provide, on average, 600 pounds of beef. That means it takes about 5.3 pounds of corn to produce a single pound of beef.
A bushel consists of 56 pounds of shelled corn, so 5.3 pounds is a little over 9 percent of a bushel. At $8 a bushel, there is $.72 of corn in one pound of beef.
So my massive 16-ounce breakfast steak, which retails on average for $6.90 a pound, contains $.72 of corn, or just over 10 percent of its total price. (Read More: Can Drought-Tolerant Seeds Save the Crop?)
EGGS
A hen eats about one-eighth of a pound of corn a day, or 46 pounds a year, which is four-fifths of a bushel, or about $6.51 worth of corn. During that year she will lay, on average, 250 eggs. That works out to about two and a half cents worth of corn per egg, or three percent of the total average retail price for eggs.
BACON
It takes about 448 pounds of corn to raise a hog, and from that hog you'll get about 210 pounds of pork. That’s a two-to-one ratio corn to pork (a lower ratio than beef, which shows how much more efficiently pigs use feed).
About 1.1 pounds of corn goes into making a half pound of bacon, which is two one-hundredths of a bushel, or about 16 cents worth of corn. With bacon selling for $2.18 a half pound, corn makes up seven percent of that price.
MILK
Finally, the cow. Your average dairy cow will produce 5,814 gallons of milk over her life, and eat a whopping 12,810 pounds of corn. That equates to 2.2 pounds of corn per gallon, which is four-tenths of a bushel, or about 32 cents in a gallon of milk — two cents in one 8 ounce glass. That is about 9 percent of the current retail price for milk.
BOTTOM LINE:
A breakfast made up of a 16 ounce steak, two scrambled eggs, a half pound of bacon, and a glass of milk (that's some breakfast!) will, according to the USDA, cost about $9.57. There will be $.95 worth of corn in it, or around 10 percent. One-tenth of the entire cost of the meal. (Read More: Spike in Crop Prices May Signal 'Chronic Food Crisis.')
Add to that the cost of transportation, packaging, and other feed, and the cost doesn't even include the corn needed to feed the mothers of these animals when they’re young, or feeding a cow before she's old enough to produce milk.
On the other hand, these figures also assume livestock producers are paying the full current cash price for corn. Many contracted at least some corn earlier this year at a lower price. Plus, some supplement their feed with DDGs, the high-protein corn residual after the energy is removed from kernels to make ethanol. (Read More: Ethanol Waiver May Lower Corn but Raise Energy Prices.)
So that means a lot of the more recent high cost of corn has yet to be factored into the price of food. The question will be how much more producers will be pay down the road, when their current contracts end, and $8 corn really is the new normal. Then how much will you have to pay for food?
—By CNBC's Jane Wells
@janewells