July 18, 2007
Report says Ethanol has little impact on consumer food prices
The production of ethanol from corn has had minimal, if any, impact on consumer food prices while reducing fuel costs to consumers across the country, according to a new study released.
Nebraska Senator Ben Nelson, Chairman of the Ethanol Across America education campaign, hailed a new Issue Brief addressing these issues as a calm voice in a debate that has become confused due to misinformation.
"America's farmers are the most efficient and productive in the world'' said Senator Nelson. "With this new demand will come increased yields and a likely leveling of prices. Even a recent study by critics of the corn ethanol industry concedes that the level of production we are calling for in Congress should not appreciably affect corn prices. We are also working hard to diversify our biofuel production by utilizing new feedstocks that range from specialty energy crops to waste materials.''
The Issue Brief, which is a compilation of existing data and research, makes the point that while corn prices have indeed nearly doubled in the past year, according to the U.S. Commerce Department's Consumer Price Index (CPI), food costs have increased just 2%, which is less than their historical average of 2.9% per year. And, during this time, petroleum prices increases have had an even greater impact due to higher costs of bringing products to market and food processing.
According to Douglas A. Durante, Director of the Ethanol Across America campaign, ethanol clearly is helping consumers at the gas pump. According to a survey this week by the Nebraska Ethanol Board, fuel prices in Nebraska are among the highest in the nation, yet ethanol blends ranging from E-10 to E85 are significantly less expensive than gasoline.
"The petroleum industry can not have it both ways,'' said Durante. "They cannot continually blame high prices on tight fuel supplies, and then ignore the fact that ethanol adds to the fuel supply. After they take advantage of tax incentives they are making significant profits off of ethanol and as the Nebraska example illustrates, they can still offer ethanol at a lower cost.''
"I think we are losing sight of the big picture and our pressing needs of producing our own energy, reducing greenhouse gases, creating jobs across the U.S., and revitalizing rural America. We welcome thoughtful questions regarding the use of our resources and we ask that the answers be given equal attention.''
"While it is not a silver bullet, and never intended to be, through the ethanol program we are addressing our most fundamental problem, which is that we are sending billions of dollars to foreign oil interests with nothing to show for it other than increased dependence on others for our transportation fuels,'' said Durante. "Corn ethanol is one step towards energy independence and it is a step that benefits all consumers. As we move towards a wider range of non petroleum feedstocks these benefits will be even greater.''
For copies of The Impact of Ethanol Production on Food, Feed, and Fuel, please log on to http://www.EthanolAcrossAmerica.net.