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WASHINGTON (Reuters) - U.S. consumers will see higher grocery bills this year thanks to a surge in wholesale corn prices, pushed higher by an ethanol fuel boom, that will be passed on by food manufacturers, the industry said on Wednesday.

“It’s inevitable. Everyone of our members is talking about this now,” said Cal Dooley, head of The Grocery Manufacturers/Food Products Association, a trade group representing the food, beverage and consumer products industry. The group’s members include Coca-Cola CO., Hormel Foods and Kellogg Co..

“You’re beginning to see it, but you’ll certainly see increased evidence of these (price increases) in another six months,” he added.

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The price increase will be felt across a large swatch of products — from ketchup and beverages that depend on corn sweeteners to beef, poultry and pork where animals are fed corn.

Soaring U.S. demand for ethanol fuel made from corn has pushed the grain to its highest prices in a decade, which in turn is expected to reduce wheat and soybean plantings in the coming years, likely resulting in higher flour and meal prices.

“When it’s across the board where every company is being faced by it, those prices will be passed on,” said Dooley.

Corn prices have nearly doubled in the last year — rising from about $2.35 a bushel a year ago to around $4.15 a bushel today. This year’s corn crop is forecast to sell for an average $3.60 a bushel at the farm gate, a record, according to the U.S. Agriculture Department

The price increases we’ve seen in corn lately, it definitely is impacting our cost of production,” said Julie DeYoung, a spokeswoman with privately-held Perdue Farms Inc.

U.S. meat producer Smithfield Foods Inc. estimated a corn price of $4 will increase feed costs across beef, chicken and pork by about $300 million annually. While the company hasn’t increased prices yet, Smithfield has notified retailers it plans to do so in the near future.

“Any time your costs increase $300 million it’s a major concern,” said Jerry Hostetter, a Smithfield spokesman.

USDA has estimated that corn used for ethanol will jump 50 percent in 2007 with 3.2 billion bushels of the estimated 12.1 billion crop going toward the renewable fuel. It forecast last week, however, that U.S. food prices are expected to rise a modest 2 to 3 percent this year.