LETTER: Ethanol isn’t increasing food costs

By Ron L. Schultz/Fremont
Tuesday, Aug 26, 2008 - 11:04:40 am CDT

There is a lot of talk of higher food prices, and some people are trying to blame corn ethanol. I thought it would be a good idea to share some information comparing food and fuel prices.

Americans pay about $1.10 per gallon more for gas this year than last year at this time, and $2.60 per gallon more than we paid five years ago. That means an average family is paying about $4,300 per year for gas now. Just five years ago we paid about $1,200. It wasn’t that long ago a $20 bill would fill the car. Now it takes three $20 bills.

Now let’s look at food prices. In early 2002, the average family paid $102 a week for food, including eating out, and $25 a week for gas. This summer were spending $124 a week on food, or about 23 percent more. But were paying

$83 a week for gas, an increase of 335 percent. If gas prices increased by the same amount as food, we would only be paying $1.39 a gallon today.

We need to remember that even though gas prices are high, corn ethanol is helping them from being even higher. Because ethanol increases fuel supplies, it is saving us about 60 cents a gallon at the pump, or more than $600 per family this year. And since gas prices have three times the impact on food prices as corn, ethanol helps keep food prices lower, too. A 12-ounce box of corn flakes contains less than 7 cents worth of corn, but takes 21 cents of fuel to get it delivered (the average of 1,500 miles food items travel to consumers).

Ron L. Schultz is with Pathfinder Company Farm Management, Fremont

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not buying it
Aug 26, 2008 1:03 PM
Ethanol fuel also burns faster which means you are filling up your car more often. Essentially you are paying more for gas in the long run by using ethanol.
h
Aug 26, 2008 5:12 PM
I disagree with some of your facts. It has been quite awhile ago that a $20 bill filled up a gas tank. When I started driving (16 years ago), it was between $20-25 to fill up my mom's station wagon. It did not have a huge tank, like many of the vehicles now. Also, last I knew, the government was subsidizing ethanol to make it cheaper than regular gas, so we are actually paying more for it in the long run. You also can't just compare the price of cornflakes as in the items that have gone up. What about meat, milk, cheese, eggs, etc that rely on corn for their feed? The price of gas affects all grocery costs, but corn plays a role in most of it somewhere in the food chain as well.
Brian
Aug 26, 2008 5:33 PM
My 95 Toyota gets very close to the same milage on a tank of gas whether I put in the 87 regular unleaded octane fuel vs the 89 10%ethonal octane fuel. I concede maybe a little less but not a significant amount like 20-25 miles per tank full of gas. It comes down to seasonal temps (whether I use the heater or AC) or waste time in drive throughs at banks or fast food places. The point I am getting at is driving habbits affect milage more than the octane of fuel.
Tom
Aug 27, 2008 9:51 AM
Just about all the ethanol produced in the US is made from cow feed that is cracked, soaked in water for a few hours then dried and finally fed back to the cows.

It is just silly to think that ethanol is some how using up all the corn.
aaron j
Aug 27, 2008 10:23 AM
Another reason the price of corn is so high is because the U.S. exports so much corn to China and India because of the growing demand for beef in those countries.
Mindless Drones
Aug 27, 2008 1:03 PM
The problem boils down to SUV's. Everybody thinks they have to have one. Gotta keep up with the Jone's is a poor mindless thought process. How many times do you see massive SUV's driving around with 1 person in them. Or a family of 4 that thinks they need a massive gas guzzler. I drive a smaller 6 cyl car and when the soccer mom in the escalade takes off faster then I can in my car, they've got to be getting at least 2 MPG.

Come on people, ditch the massive oversized gas guzzling resource hogs you're driving and get something economical.

As for ethanol, it isn't hurting our food prices, Exxon and BP are hurting our food prices with consistant record high profits. We have a surplus of corn, it is the oil companies sticking it to you.
CM
Aug 28, 2008 3:02 PM
Inflation and the Federal Reserve printing presses are increasing food costs.
george
Aug 28, 2008 9:56 PM
Cheap corn drives huge industries in the U.S. and we no longer have cheap corn, (that)will come back to bite us. Also, it's not good to burn your food in your gas tank, if the day comes when there are food and fuel shortages, which will we choose? Will the poor starve while others still drive there gas guzzlers? I think ethanol is a terrible energy source. We can do much better!
Brian
Aug 29, 2008 12:55 PM
Geroge,
you are badly overestimating the effects of ethonal on the food supply system. First of all our energy does not come entirely from ethanol. Its a mere fraction compared to all other energy sources. Secondly the poor are not going to starve to death from putting ethanol in the gas tank. Corn yeilds per bushel an acre are higher then ever before overall in history. Secondly alot of corn not used in fuel or human food is fed to livestock which in turn used for human consumption i.e. poultry, beef/dairy products, pork are the best known examples. Thirdly, anyone so poor that they are on the verge of starving to death from poverty is obviously eligible for wealfare, housing, food stamps, medicare/medicade and other government help so they will NOT be starving to death. Anyone with enough income to not be eligible for gov help will be able to afford the basics of food & shelter and NOT starve either. They may have to give up "LUXERIES" such as cable TV & cell phones, internet, ect, but no one will starve. That is a budgeting issue that people face in a spoiled society of today but that is another topic for another time.
Stacia Johnson
Aug 30, 2008 7:27 AM
I would like to thank Don Peterson and Associates for sponsoring the Concert on the Lawn at May Museum, featuring the Blair Community Band. It was a wonderful evening. My husband, Mother In Law and myself walked to the museum with the dog. It is somthing that we really miss. The Music with the Museum backround is wonderfull. Thank you Don Peterson. We loved it.(and the ice cream)zkuzd
Stacia M. Johnson
jrob
Sep 1, 2008 12:41 PM
One statement made by Mr. Scultz that I have to question is his statement that ethanol saves us 60 cents a gallon. At any gas station I go to ethanol is 10 cents cheaper not 60 cents. Using ethanol means you fill up more often. So really, to say there is any kind of savings in the long run, is not true. Because I fill up more often, getting less miles per gallon, I believe ethanol costs more. My mechanic also tells me he sees a negative effect on my car engine from ethanol. I think this is a flash-in-the-pan quick fix attempt by a group of people who benefit from our ethanol purchase. Many people buy into anything that sounds good on the surface and don't look into the details to see if the quick fix is good for us or a detriment in the long run. Mr. Schulz puts out some figures that make him sound like he knows what he is talking about and can back it up but are these "facts" true,verifiable? A healthy skepticism would be a good idea in this situation by us all. If ethanol proves out to be as Mr. Schultz says it is great. Until we all know for certain be skeptical, learn the facts for yourself. The "facts" from someone who has a dog in the fight deserves skepticism.
Joe
Sep 2, 2008 8:50 AM
jrob- E85 is about $.60/gallon cheaper than regular unleaded. E85 is 85% ethanol. The 89 octane that is $.10 cheaper is only 10% ethanol.
UNREAL
Sep 2, 2008 9:54 AM
To Brain:
What world do you live in??? Corn prices have gone up over 300% since January 2006 but you don’t believe that affects food prices. January 2006 corn sold for $2.00 a bushel and in July 2008 corn is going for $7.50. Simple economics; higher prices mean higher costs to feed the chickens and produce other food products. Then throw in higher fuel prices for transportation & farming; that’s a double whammy on food costs all before it reach the store shelves.

Did your income increase by 300%? Mine didn’t and I’m sure millions of others (rich included) didn’t either. Why don’t you take off the blinders, quit drinking the kool-aid and see what’s happening in the real world. I suggest volunteering at a homeless shelter but I’m sure you’re too busy blogging all day.