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Ag Value  |  Ethanol Prices  |  Food vs. Fuel

Food or Fuel
Corn used in ethanol production is field corn that is fed to livestock, not the type of corn typically consumed by humans. The ethanol production process transforms this corn into ethanol—as well as a high-value livestock feed, corn sweeteners, corn oil and lots of other food products that actually increase the volume of food available at the grocery store.

The demand for ethanol has increased the demand for corn, causing corn prices to rise. Higher corn prices are an incentive for corn producers to plant more—and they are. With this incentive and improved technologies and better management techniques, corn producers can meet the demands of the fuel and food industries now and in the future.

As for food prices, the market price of corn really doesn’t have much of an impact on food prices at the grocery store. From March 2006 to March 2007, a period in which corn prices rose quite a bit, retail food prices only increased 1.03%, which is less than half the normal annual food inflation rate of 2.9%.

For a PDF report that explains some myths of the Food vs. Fuel issue click here.

For an analysis of the impact of higher corn prices on consumer food prices click here.

For more information on the Food vs. Fuel issue, visit:

• National Corn Growers Association
• Ethanol Across America

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