Rising Food Prices a Result of Oil, Not Corn
Corn prices have had minimal impact on rising food prices according to a report released by Texas A&M's Agricultural and Food Policy Center. Instead the study says the underlying force raising the cost of food is higher oil prices, and the cost of groceries like bread, milk and eggs are unrelated to corn prices or ethanol.
"The Texas A&M study dispels the food versus fuel debate," says National Corn Growers Association President Ron Litterer. "This study shows there are many forces creating increases in food costs and ethanol is not a major factor. Clearly, corn is meeting the demands for biofuels."
The report also found that relaxing the Renewable Fuels Standard that calls for the use of 36 billion gallons of renewable fuels by 2022 would not lower corn prices. The ethanol infrastructure is in place and the industry has grown in excess of the RFS, so relaxing it would not lower corn prices.
According to the study, the price of oil that has gone to $100 per barrel is the main factor impacting the agricultural industry and the economy as a whole.
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