The Facts on Ethanol

> Overview

> Food and Fuel

> Higher Blends

> Performance

> Blender's Credit

> Ethanol Tariff

> Natural Carbon Cycle

> Indirect Land Use Change

> Water Use

> Renewable Fuel Standard

According to John Urbanchuk of LEGC, a $1 increase in a bushel of corn impacts food prices .3% while a $1 increase in the price of a gallon of gasoline impacts food prices two to three times that from .6% to .9%.

The Facts on Ethanol - Food and Fuel

Food and Fuel. What's the debate?

As the United States continues to realize the tremendous social, economic and environmental benefits of ethanol, critics have sprung up to attack this vital industry. Some have claimed that the ethanol industry's impact on corn prices has translated into an increase in consumer food prices. According to these misinformed detractors, ethanol is solely responsible for the higher costs of everything from the staples of meat and milk, to adult beverages like beer and tequila, and even popcorn and gummy bears.

The real story.

Contrary to this thinking, the ethanol industry actually has a very minimal impact on the price of consumer food. We believe it's clear that other factors such as energy costs and inflation have a much more significant impact on food prices than does the price of corn. As a matter of fact, according to the United States Department of Agriculture, for each dollar spent on food by the consumer, less than 16 cents is for the actual cost of food. The rest goes to other costs such as marketing, packaging and transportation.

Is it true? Is food getting more expensive?

Yes, food prices are increasing. The USDA forecasts a 2.5-3.5 percent increase in 2012, slightly above the 20-year average.

What is the outlook?

The National Corn Growers Association has estimated that that approximately 15 billion gallons of ethanol can be produced from corn without giving up the existing domestic and export markets.

The big picture.

We believe the big first step to energy independence and a cleaner environment is corn-based ethanol. But we don't think corn-based ethanol will get us all the way. We believe the next step is cellulosic ethanol and great strides are being made in this area. A 2005 U.S. Department of Energy and U.S. Department of Agriculture study concluded that the U.S. could produce 60 billion gallons of ethanol by 2030 from grain and cellulosic feedstocks without harming food, feed or fiber production.