Publish date: TV Recap: Corn-Fed Inflation

The politically fueled price of ethanol is piling up on the Fed's inflation plate, Cramer says.

The Federal Reserve's picture on inflation is likely being distorted by the drive for ethanol, Jim Cramer said on TV's Wall St. Confidential Web video Tuesday.

A lot of people believe that under President Bush the economy's been great, which is true, Cramer told Gregg Greenberg, the host of Wall St. Confidential. "The stock market's been great."

But recently, for reasons Cramer believes are tied to keeping the Republicans in the White House and have much less to do with energy independence, there's been a push on ethanol, Cramer said.

That has driven up "dramatically a very important raw good

corn in the panoply of things the Fed looks at," he said. "This is damning to me." (Corn is the primary feedstock used in U.S. ethanol production.)

The Fed is looking at inflation, more so than housing and consumer spending, and "inflation is the grain complex," Cramer said. "It's not going to go down because it's been mandated by the president to go up."

Greenberg pointed out that shares of chicken, egg and dairy manufacturers, such as

Pilgrim's Pride

(PPC) - Get Pilgrim's Pride Corporation Report


Tyson Foods

(TSN) - Get Tyson Foods, Inc. Class A Report

, are up significantly over the last six months.

TheStreet Recommends

"One of the things that is remarkable about the lack of antitrust in this country is that they've allowed these companies to get together," Cramer said in response. "There used to be some vicious, vicious price competition in some of these markets." But that's been "wiped away" by mergers.

Cramer directed listeners to the

Buffalo Wild Wings


conference call, where the "excellent management" talks directly about the cost of wings. If the Fed looked at this, it would realize that there is a problem, Cramer said.

He said he knows there's been a lot of corn-planting and he is still "a big believer" in the agricultural complex. "The agricultural and defense complex are both supported by the Democrats, which makes it so that I feel the inflation there is going to continue."

Jim Cramer is a director and co-founder of He contributes daily market commentary for's sites and serves as an adviser to the company's CEO. Outside contributing columnists for and, including Cramer, may, from time to time, write about stocks in which they have a position. In such cases, appropriate disclosure is made. To see his personal portfolio and find out what trades Cramer will make before he makes them, sign up for

Action Alerts PLUS. Watch Cramer on "Mad Money" weeknights on CNBC. Click

here to order Cramer's latest book, "Mad Money: Watch TV, Get Rich," click

here to order his book, "Real Money: Sane Investing in an Insane World," click

here to get his second book, "You Got Screwed!" and click

here to order Cramer's autobiography, "Confessions of a Street Addict." While he cannot provide personalized investment advice or recommendations, he invites you to send comments on his column by

clicking here. has a revenue-sharing relationship with Traders' Library under which it receives a portion of the revenue from Traders' Library purchases by customers directed there from