Reply #13: Don't Blame Ethanol For Soaring Food Prices [View All]

[Fledermaus]

The popular misconception that increased usage of corn for ethanol production is the only factor driving higher food prices is just that — a misconception.

Ethanol production has added and will continue to add to corn demand, but other factors also are playing major roles in higher food prices.

Global demand for U.S. agricultural products has increased significantly over the past several years. China and India are but two examples where growing affluence is leading to changes in diet and overall food demand. Helping add to export demand is the devaluation of the dollar. This makes corn, soybeans, wheat and other commodities produced in the U.S. particularly attractive to overseas buyers

Francisco Blanch of Merrill Lynch has been reported in The Wall Street Journal as saying biofuels are lowering the price of oil and gasoline by 15 percent.

http://www.courant.com/news/opinion/commentary/hc-runoverstallman0420.artapr20,0,2345791.story

"The ongoing food versus fuel debate would be funny if it weren't so dire for farmers and consumers alike," Woodruff says. "Fuel has more impact on retail food prices than the price of any raw commodity and homegrown ethanol now replaces five percent of our nation's imported oil supply. This is helping our balance of trade by saving billions of dollars. It also generates more than 230,000 U.S. jobs and about $8 billion in tax revenue annually."
http://www.wisconsinagconnection.com/story-state.php?Id=490&yr=2008