"Not surprisingly, since the ethanol mandate was enacted five years ago, the ethanol industry's corn consumption has tripled. Our cars now burn up a third of the nation's corn crop.
"I don't see why we can really justify subsidies, when all that does is raises cost of producing food," says economics professor Bruce Babcock, of Iowa State University.
Ethanol policies increase the cost of food at least 1.5 percent, Babcock says. And the impact on meat prices is significantly greater.
It's economics 101, he says. Ethanol plants increase the demand for corn, driving up the prices for other buyers — like livestock producers. International demand is up, too – and we're exporting more ethanol than ever before. Many grain farmers are seeing record incomes this year."
"Ethanol demand has helped send corn prices soaring.
And economist Babcock says the mere fact that ethanol comprises about 8 percent of fuel consumed in the United States has already changed the ebb and flow of the commodity market behind food.
"We've now hitched the price of corn, inextricably linked the price of corn, to the price of crude oil, and I think we can't turn the clock back, that's the way it is."
With corn prices more closely tied to oil prices, when the price of gas goes up, it raises the demand for ethanol — and that means consumers will feel it in two places: at the gas pump and on the dinner table."
http://www.npr.org/2010/12/22/132082...-blame-ethanol
Considering the fact next year will be rough for inflation and the economy as a whole, this article struck me with great interest.
I do believe oil will start to rise again next year as the dollar is further weakened. But with it will come greater consequences then before.
Sometimes it feels like we have linked all the cards together. So when the house of cards fall every last one will fall at the same time.



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