A couple of weeks ago, we told you about how Purdue University had come out with a study that showed that increasing costs for oil were responsible for 75 percent in the rise in the price in corn, while demand for ethanol accounted for just one-fourth of corn’s skyrocketing price.
Now, a report coming out of Nebraska also says the real blame for the spike in food prices are higher fuel costs and greater world grain demand:
The report, “The Impact of Ethanol Production on Food, Feed and Fuel,” was produced by Ethanol Across America and co-sponsored by the Nebraska Ethanol Board. The findings confirm a recent study by Purdue University, which found that record high oil prices have caused 75% of the inflation in corn prices.
Ethanol is reducing gas prices. In Nebraska, about 77% of all gasoline sold contains ethanol. E10 is typically 10 cents cheaper than regular and economists have found that ethanol production lowers oil prices by 15% nationwide. Ethanol will save Nebraska motorists more than $70 million at the pump during 2008 according to the Nebraska Ethanol Board.
Ethanol Board Chairman Jim Jenkins said that ethanol generates a resounding economic benefit to Nebraska by lowering gas prices and providing livestock producers with lower-cost feeding alternatives.
“As a cattle producer and restaurant owner, I am directly impacted by skyrocketing energy prices. High energy costs hit everyone hard, but Nebraska ethanol is lowering gas prices. Ethanol also provides relief for the livestock producer with high quality, low cost feed in the form of distillers grains,” Jenkins said. “The Nebraska economy is significantly better off as a result of our $4 billion ethanol industry, which has made our state a net exporter of motor fuels.”
You can read the entire report at the Nebraska Ethanol Board’s web page in the “Resources” section.