What is in this article?:
- Revisiting ethanol’s impact on corn, feed prices
- Similar to April study
• Last month, Bruce Babcock of Iowa State University released a report for the International Centre for Trade and Sustainable Development that looked at the impact of the ethanol blender’s credit on corn prices and found that corn prices would have been only up to 17 percent lower had the credit not been extended in late 2010.
As the debate over ethanol policy continues in Washington, reviewing recent research on the subject of ethanol and corn prices may prove insightful especially when one set of ethanol opponents blames biofuels as the leading cause of higher livestock and poultry feed prices.
“There is a lot of false rhetoric out there about the impact of ethanol policy on corn prices and by extension the price of food and feed,” said NCGA President Bart Schott. “The research does not support this rhetoric and it is time to move past this and work together for stronger economic security and a broad approach to energy independence that can help reduce costs.”
Last month, Bruce Babcock of Iowa State University released a report for the International Centre for Trade and Sustainable Development that looked at the impact of the ethanol blender’s credit on corn prices and found that corn prices would have been only up to 17 percent lower had the credit not been extended in late 2010.
The report also extends its consideration to prices of corn products and sees a diminishing effect.
“Ethanol subsidies have not been the major driver of higher commodity prices,” the report states.
“The impact of U.S. ethanol policies through higher feed costs on consumer prices of eggs, beef, pork and broilers was even smaller. The largest impact on any of these products was a two-cent-per-dozen (1.1 percent) increase in egg prices. All other product prices were impacted by much less than 1 percent.”
