Ethanol Guzzles 25% of US Corn; Links Food, Fuel Prices

Switch to corn-based fuel links grain and energy prices

By Kevin Spak,  Newser Staff

Posted Apr 30, 2008 2:28 PM CDT

(Newser) – When Congress passed its latest energy bill four months ago, the provision to boost ethanol requirements was exceedingly popular. But now, critics are lambasting that measure, and the ethanol movement in general, for linking skyrocketing food and oil prices. “We used to have a grain economy and a fuel economy,” one analyst tells the Washington Post. “Now they're beginning to fuse.”

Now consuming 25% of US corn crops, ethanol is pushing the demand for corn through the roof, and the resultant price increase is rippling through the food industry. Meat and dairy farmers are paying more for their livestock feed, and everything from cereal to soda is hit by corn syrup and cornstarch hikes. “As long as you keep that ethanol industry running, grain prices will be high,” said one economist.

A grain transport truck is loaded up with corn, harvested in the fall of 2007, in Curran, Ill., Friday, March 14, 2008.
A grain transport truck is loaded up with corn, harvested in the fall of 2007, in Curran, Ill., Friday, March 14, 2008.   (AP Photo/Seth Perlman)
A handful of corn is shown before it is processed at the Tall Corn Ethanol plant in Coon Rapids, Iowa, in this May 24, 2006, file photo.
A handful of corn is shown before it is processed at the Tall Corn Ethanol plant in Coon Rapids, Iowa, in this May 24, 2006, file photo.   (AP Photo/Charlie Neibergall, file)
Jarrod Flores works on a dryer cover at an ethanol refinery being built by South Dakota-based Poet LLC in Portland, Ind. in this April 17, 2007 file photo.
Jarrod Flores works on a dryer cover at an ethanol refinery being built by South Dakota-based Poet LLC in Portland, Ind. in this April 17, 2007 file photo.   (AP Photo/Darron Cummings, file)
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