is part of the Division of Informa PLC

This site is operated by a business or businesses owned by Informa PLC and all copyright resides with them. Informa PLC's registered office is 5 Howick Place, London SW1P 1WG. Registered in England and Wales. Number 8860726.

  • American Agriculturist
  • Beef Producer
  • Corn and Soybean Digest
  • Dakota Farmer
  • Delta Farm Press
  • Farm Futures
  • Farm Industry news
  • Indiana Prairie Farmer
  • Kansas Farmer
  • Michigan Farmer
  • Missouri Ruralist
  • Nebraska Farmer
  • Ohio Farmer
  • Prairie Farmer
  • Southeast Farm Press
  • Southwest Farm Press
  • The Farmer
  • Wallaces Farmer
  • Western Farm Press
  • Western Farmer Stockman
  • Wisconsin Agriculturist
Corn+Soybean Digest

Ethanol’s Impact On Food Prices

A new study released last week estimates that increased corn prices, “driven by rapidly expanding” U.S. ethanol production, has increased U.S. retail food prices by $14 billion annually. The study also projected the impact if season-average corn prices increased to $4.42/bu. over a 10-year period ending in 2016, and assuming crude oil prices ranged from $65-70/barrel. Given those assumptions, the impact on the following commodities is projected against the $2/bu. corn prices that existed in mid-2006:

  • Pork: Production costs would increase by 36.8% and production would decline by 9.2%, retail prices would increase 8.4% and exports would decline by 21%, reversing 15 consecutive years of pork export growth.
  • “Poultry: Broiler exports would decline by 15%, while turkey exports would fall by 6%. Wholesale broiler prices would increase by 15%, retail prices would increase by 5% and domestic consumption would decline by 4%.
  • “Beef: Retail beef prices would increase 4% and production would decline by 1.6%. Significantly, since the study projects that the price of distillers dried grains with solubles will closely track increasing corn prices, the impacts of such price increases are nearly as significant for beef and dairy as they are for hogs and poultry.
  • “Corn: U.S. planted acreage would increase by 44%, from 78 million acres in 2006 to 112.5 million acres. Meanwhile, U.S. corn exports are projected to decline from 2.4 billion bushels, currently, to as low as 911 million bushels – a 63% decline.”

The study concluded that if the current 54-cent/gal. ethanol import tariff were eliminated, imports of foreign-produced ethanol would increase by 136% (from 314 billion gallons, annually, to 743 million gallons). The study was done by Iowa State University and supported by the American Meat Institute, Grocery Manufacturers/Food Products Association, National Cattlemen’s Beef Association, National Chicken Council, National Grain and Feed Association, National Pork Producers Council, and National Turkey Federation.

Hide comments

Comments

  • Allowed HTML tags: <em> <strong> <blockquote> <br> <p>

Plain text

  • No HTML tags allowed.
  • Web page addresses and e-mail addresses turn into links automatically.
  • Lines and paragraphs break automatically.
Publish