Serves the Commercial Small Fleet Market of 10 – 50 Vehicles

Rising Demand For Ethanol Could Raise Food Prices

March 13, 2007

Ethanol plants are projected to use 50 percent of all harvested corn this year, and the results may ripple down through the food industry and manifest in higher overall food prices for the consumer, reports The Seattle Times.Even though people do not eat the kind of corn that makes ethanol, livestock does, and the increased cost in feed may result in higher prices for animal products. Demand for ethanol is also enticing farmers to switch their crops to the more lucrative corn, causing a decreased supply of the other grains that people eat. Agriculture Secretary, Mike Johanns, however, has stated that food price increase will be minimal, and that the department anticipates an increase of 2 percent to 3 percent every year. Minnesota Rep. Colin Peterson says that an increase in food price might not be such a bad thing considering that the country has subsidized food production for so long, and that the new prices will in fact be a more accurate representation of the real economic price, The Seattle Times. These topics were broached recently at The Agriculture Department’s annual Outlook Forum. Also discussed was the negative impact that ethanol may have on world hunger and the probability of President Bush’s goal of using 35 billion gallons of renewable fuel by 2017.
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