Don’t Blame Ethanol and the RFA for High Food Prices

Source: By Bob Dinneen, RFA, Wall Street Journal • Posted: Wednesday, May 27, 2015

There is no support for the statement that ethanol production has driven up food prices.

 Mike Brown and Rob Green’s “Paying for Ethanol at the Pump and on the Plate” (op-ed, May 15) is more of the same from those who want superlow-priced, government-subsidized feed. But with corn prices currently below the cost of production for most farmers, the argument from the heads of the National Chicken Council and the National Council of Chain Restaurants strains credibility. There is no support for the statement that ethanol production has driven up food prices, only questions about why food prices haven’t fallen as the price of corn has plummeted.

These two CEOs fail to take into account a number of key factors. First, last year’s farmers produced the largest corn crop in history as 14.2 billion bushels were harvested at a record-breaking 171 bushels per acre, increasing the total amount of corn available to be used for feed, fuel and fiber. Second, the production of ethanol uses less than 3% of the total grain supply world-wide. Third, only the starch is used in the production of ethanol; all of the protein, vitamins and feed value of the corn remains and is used in livestock- and poultry-feed regimens here and abroad. Finally, ethanol is the lowest-cost fuel and octane source on the planet, reducing transportation fuel costs for consumers and for producers.

 

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