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Ethanol Not Only Blame for High Food Prices Save Email Print
Lincoln, Neb.
Posted: 9:14 PM May 7, 2008
Last Updated: 9:48 AM May 8, 2008
Reporter: Alicia Myers
Email Address: alicia.myers@kolnkgin.com

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With rising food prices, some U.S. Senators are second-guessing the amount of ethanol that should be produced this year.

The governor of Texas and 26 senators are asking the Environmental Protection Agency to cut in half this year's requirement for 9 billion gallons of corn ethanol.

They say that would cut food costs. The National Corn Growers Association says ethanol's not the only culprit for raising food prices.

Wednesday, Rick Tolman, CEO for the National Corn Growers Association, spoke with reporters, just one day after testifying to Congress that corn and ethanol producers should no longer bear the brunt of complaints about high food prices.

The rising cost of food prices has been on the minds of many lately, with some of the blame going to ethanol producers.

"One-quarter to perhaps one-third is coming from higher grain prices. The three-quarters or two-thirds is coming from other things, primarily high fuel prices," said Tolman.

Tolman said ethanol has been receiving unfair blame in the past few years, for the continual rise in food prices.

"When you go to the grocery store, it costs you more to drive there. It costs more for the farmer to produce the food. It costs more for that food to be transported to the grocery store. It costs more for the grocery store to process it, store it, and refrigerate it. These higher energy costs are killing us," said Tolman.

Higher energy costs, and the high price of oil.

"The impact of higher oil has three times the impact of corn prices. In fact, the dollar a gallon increase in the price of gasoline, versus $1 bushel increase in the price of corn, has three times the impact at the retail level," said Tolman.

Some U.S. Senators are pushing for a change, saying this year's ethanol production requirement for nine billion gallons should be cut in half. They say this would lower food prices.

Tolman doesn't agree.

"A roll back in the renewable standard now would have no impact on retail food prices, and would really have no impact on corn prices. Eighty-one cents of every dollar we spend on food doesn't go to the farmer, it goes for fuel costs, it goes for labor, it goes for packaging. These retail prices are much more influenced by fuel prices and labor and packaging," said Tolman.

Senator Ben Nelson said he's signed a letter to the Environmental Protection Agency to block cuts to requirements for corn ethanol.

He said he suspects the high cost of oil for transportation bears more blame for the high price of food. He said opponents simply want to blame the closest thing they can, and ethanol is it.

The President of the Renewable Fuel Association said if ethanol production were cut in half this year, gasoline prices could increase by nearly a third.

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Posted by: Rodney Location: Pawnee City on May 8, 2008 at 02:52 PM
It is not surprising that the oil interests have the Texas Goveernor speaking for them. Three decades or so Texax wanted to pipe the Ogallala aquifer water supply to Texas to keep up all their irrigation, hang what was best for Nebraska. Now that some of the costs of engery production is being shared by some other states other than Texas they want scream foul to a renewable resource. Oil interest has received tax incentives and subsidies for years but I don't hear anyone screaming unfair and they should take it out of the huge profits they are enjoying now on top of costs being passed to consumers on top of their continuing "tax incentives". Perhaps the rumors of filling tank farms at the expense of another or shutting production of U.S. oil to accomodate the imported oil is not true. But one wonders.

Posted by: Kevin Location: Lincoln on May 8, 2008 at 09:29 AM
Well, no matter how you put it. When you use food to produce fuel, it will effect the price of food. Now, it may not bare the brunt of the food prices growing. It does not help when it is linked directly to the fuel prices. Fuel prices going up, corn going up??? Food prices really going up!! We are getting double whamied not including our taxes going up becuase those two are going up. Health care going up beyond affordable to the brink of disastrous consequences for everybody. Do you think we get to go before Congress and get our say. We get the shut up and go to work while we find more things to do with your money cold shoulder. Where's the solution? I say we start with one step at a time. Seeking alternative fuels, making sure our food supply is not directly linked to our fuel needs. It's just common sense for us to take on the next step. And then making sure our elected officials are doing their best to keep from spending our money on fruitless efforts. Thats where we step in, VOTE!

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