In its report, the organization found that the recent in food prices has little to do with corn demand for ethanol. Instead, the report shows that weather and high energy costs are to blame.
"AFBF said that nearly all the evidence points to factors other than ethanol demand, including an early freeze that zapped fruits and vegetables, low world supplies of wheat, milk producers’ cutting back on production in response to last year’s low prices and the rising cost of energy."The report also indicated:
“There is little evidence that any food category has been affected by higher corn prices in any significant manner,” said AFBF economist Terry Francl."The report correctly indicated that corn is usually "just a tiny fraction" of a product's price.
Finally, the report by FB economist Terry Francl noted that “Ethanol is unfairly getting a bad rap because people aren’t looking at all the other factors that are involved in food prices."
As this report and other industry experts have also noted, the recent record corn crop planting for this year should further ease any remaining concerns about higher ethanol production.
Read the AFBF report, Fuels Versus Food: Is it Rhetoric or Reality? (PDF) HERE.
Source: American Farm Bureau
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