Comments ahunt has made

Link to Ethanol and Food Price Report; other info

The report I mention about ethanol's impact on final retail food prices relative to rising oil costs is available here and is from the Renewable Fuels Association.  I found surprisingly little research on the topic, and I agree it is definitely worthwhile to question the source and the research methods.

Also, the key thing to remember here is that on average, a farmer selling into a commodity market retains only 19 cents per retail food dollar.  Rising corn prices, especially for sectors which use corn for animal feed, like livestock and dairy (note: cows are ruminants and evolved eating grass), will have the highest direct impacts from ethanol.  But the other 81 cents of the retail food dollar comes from food
distribution and marketing costs.  At least 18 cents of those food distribution and marketing costs (about equal to the farmer's share), will have direct energy costs from energy, transportation, packaging, and overhead.

USDA has a two minute video on the topic.

This is not a new trend, but why we notice this now is because the demand for grains for ethanol has finally translated into food inflation especially in sectors using corn for feed, and the price of oil has increased at the same time.

While I too may question the RFA's exact findings, the much more important issue is that nearly 20% of the price of food is susceptible to energy price spikes.  That is not a very sustainable, nor equitable system.

-Alan HuntOn Thoughts on the farm bill and the skyrocketing cost of food posted 1 year, 7 months ago 12 Responses