Corn price is factor in rising movie ticket prices

KANSAS CITY, Mo. — The rocketing price for corn already is hurting Americans at the grocery store and the gas pump. Now it's going to hurt us at the multiplex, too.

Partly because of the rising price for popcorn, Kansas City-based AMC Entertainment announced Thursday that it was increasing its ticket prices. Also beginning Friday, AMC's popcorn price jumped 25 cents nationwide.

Ricard Gil, an economics professor at the University of California, Santa Cruz, predicted earlier this week that movie ticket prices might leap as much as 30 percent because of the cost of popcorn. Gil said concession sales allow theaters to keep down the cost of a movie ticket by nearly 25 percent. And popcorn accounts for a third of those sales.

In a Los Angeles Times interview, Regal Entertainment CEO Mike Campbell said that if theaters didn't charge what they do for concessions, "movies would cost $20."

Gil, interviewed before the AMC announcement, said that a big release — such as this weekend's "Indiana Jones" movie — would be an ideal time to introduce higher-priced tickets.

"You'll show up at the theater and find you're paying 25 to 50 cents more for a ticket. This means that the most valued customers, the ones who come out to see a movie on opening weekend, will end up paying the most."

AMC based Friday's increases on dozens of economic factors, not just the price of popcorn, company spokesman Justin Scott said.

Memorial Day traditionally is when movie theaters jack up prices.

But why not raise concession prices and leave ticket prices alone?

"It's not one or the other, concessions or tickets," Scott said. "A lot of factors are considered to find the right balance."

The once-humble corn is in huge demand as a food additive (corn syrup), livestock feed and as a biofuel source. In three years, corn prices have soared from $2 to $6 a bushel. A big factor is the Bush administration's support for corn-based ethanol, said Mary Haffenberg, spokeswoman for the Chicago Board of Trade.

"It used to be that only 5 percent of our corn crop went to ethanol. In the next few years it will be more like 30 percent," Haffenberg said. "That has an effect on food costs, since corn that used to be fed to livestock is now diverted to biofuels."

And while the U.S. is producing more corn, demand still outraces supply.

The USDA predicts that corn supplies will plunge to a 13-year low in 2009.