How the Ethanol Program is Driving Up Food Prices

Have you ever noticed a sticker on the gasoline pump that says, “May Contain Up to 10% Ethanol?”

That’s a sign of a federal government mandate that is supposed to stretch fuel supplies but is also pushing up the cost of food – and driving some food producers out of business.

The federal ethanol mandate is destroying jobs, costing taxpayers billions of dollars, doing little or nothing to reduce our reliance on petroleum products, and pushing up the cost of food – for no good reason. Congress needs to revisit this subject immediately.

Impact of the Ethanol Mandate

The people who produce food animals – farmers, ranchers, poultry companies, and others – are paying more and more for corn because of the voracious demand of the ethanol industry.

It isn’t a fair competition because the ethanol producers have a market guaranteed by law: the fuel companies are required to buy ethanol whether they want it or not, or whether motorists want it or not. Food producers have to compete for what’s left.

As a result, the price of corn has skyrocketed

The price of corn used to make feed is actually the largest single part of the cost of raising chickens. This cost has been pushed way up by the ethanol program. Some of this higher cost has already been passed along in the price of chicken. Due to competitive reasons, chicken producers have not been able to pass on the full cost. As a result, many of them are losing money and some have been forced out of business. This will probably lead ultimately to tighter supplies of chicken and higher prices for consumers.

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