Kansas City, Mo. The rising cost of corn is about to hurt your wallet in an unexpected place: at the movie theater.
Kansas city-based AMC Entertainment Inc. announced that beginning Friday, ticket prices for shows will increase $1 to $10 for weekend show times after 4 p.m. at its five theaters. It also will increase the price of popcorn 25 cents nationwide.
One key reason for the increase is the recent jump in corn prices. Thanks to the huge demand for use as a biofuel source, livestock feed and a food additive (corn syrup), the cost of corn has increased from $2 to $6 per barrel over the past three years.
U.S. farmers are producing more corn, but demand still outpaces supply and the amount of corn being used for ethanol will rise from 5 percent of the crop to about 30 percent over the next few years, according to Mary Haffenberg, spokeswoman for the Chicago Board of Trade.
"We're seeing sort of a perfect storm of factors bringing up corn prices," Haffenberg said.
So how does this affect the price of a movie?
A recent study by University of California-Santa Cruz economics professor Richard Gil showed that concession sales allow theaters to keep the cost of movie tickets down by nearly 25 percent.
He concluded that the success of a movie theater now largely rests on the price of popcorn and predicted ticket prices might increase as much as 30 percent because of popcorn costs.
Regal Entertainment CEO Mike Campbell recently told The Los Angeles Times that the cost of a movie ticket would cost $20 if theaters didn't charge what they do for concessions.
But corn costs weren't the only factor in AMC's decision to raise ticket prices.
AMC spokesman Justin Scott said the company weighed dozens of economic factors in determining whether to raise concession prices or ticket prices.
"It's not one or the other, concessions or tickets," he said. "A lot of factors are considered to find the right balance."
Scott added that AMC will expand its $5 matinee price to include evening shows, Monday through Thursday, and until 4 p.m. on weekends. The last time AMC altered ticket prices was November, when the company lowered its matinee prices from $6 to $5.