OK, Jack, I repeat specially for you.

One bushel of corn weights 56 pounds.

Five pounds of corn is used to raise 1 pound of beef live weight, 10 pounds for 1 pound of dressed meat.

Corn prices increased from 2 to 3.60$ per bushel. It corresponds to increase of price of beef of 29 cents per pound.

Corn prices increased from 2 to 3.60$ per bushel. It corresponds to increase of price of beef of 29 cents per pound.

A pound of cattle carcass is $1.44. Of that, 14.3 cents is extra corn costs. That's an 11% increase right there.

Now start ticking off all the subsidies, plus the higher costs of fuel that result from that, and so on.

To claim that it's not inflationary is silly. To dismiss the other inflation is callous.

Lets put it in perspective, Jack.

Crude oil price increased from 30$ per barrel to current 85$ per barrel. There are 42 US gallons in barrel, which roughly corresponds in increase of 1.30 dollars per gallon in pump price of gasoline. This is serious reason why we are paying more at the pump.

Increase in corn price corresponds to less then quarter dollar increase of beef price per pound. This is not serious reason why we pay more for beef at the counter.

Increase in corn price corresponds to less then quarter dollar increase of beef price per pound. This is not serious reason why we pay more for beef at the counter.

If beef is up 35% and we've shown that corn feed alone is responsible for 10% inflation, then it's, at minimum, responsible for nearly 1/3 of the price inflation of that commodity. To say that isn't "serious" is the same as saying housing expenses aren't serious, since they're "only" 1/3 of a person's expenses.

The basic thesis of this study is that ethanol policy is inflationary. Even your dash to a narrow example hasn't saved you from failing to challenge that thesis. Nor do you even dare to touch the extra costs to the economy from the massive subsidies.

With gasoline as expensive as it is now, this is precisely when subsidies should be unnecessary.

responsible of inflation or not ethanol from corn is just a stupid and dangerous idea that will NOT reduced america foreign oil dependency, that will NOT reduce global warming, but will produce huge amount of sol erosion, water shortage, water pollution, make corn producer richer and ethanol producer tremendously rich thanks to subsisdies that com from our pocket.

Thanks uncle Georges....

Corn ethanol substituted about 5% of US gasoline on energy basis, not 1% as claimed by CIBC "expert".

Let's see, 6b gal of ethanol out of what ~ 150b gal of gasoline, with ethanol @ ~2/3rds the energy content of gasoline:
6/150 x 2/3 = ~2.7%

But of course, that's before adding in the fossil fuels used to grow the corn and make the ethanol. Given an optimistic net energy yield of 1.3, the true replacement is:
2.7 x 0.3/1.3 = 0.6%

Looks like the CIBC "expert" was overly optimistic about corn ethanol.

/rant on

I think the fundamental point here is that half the world is starving and rather than trying to find more efficient ways of running your economy (your Energy intensity (Barrel OE /$GDP ratio is twice as bad as OECD and nearly 2/3rds that of China) ie profligate.

Instead of sorting out why you need quite so much oil equiv per unit GDP, you're now burning FOOD instead. With billions around the world starving. Great.

That wouldnt' be so bad if you kept it to yourselves but you don't: you export it all around the world as well, distorting markets with your subsidies and tariffs. Just the kind of protectionist nonsense that the US is always whining to the WTA about in fact. Great example.

Equivalent to a large corporation haemorraging money but instead of cutting base costs (something which US firms are always telling everyone to do) they start burning their neighbours buildings for energy instead.

Apols, Friday rant over!

I think it is healthy to examine all sides in detail and composite. I don't think anyone believes that ethanol from any feedstock is going to be the magic bullet. However it seems to me that ethanol is working, and is increasingly finding more efficient feedstocks, production, distribution, and application.

First, look at the huge disconnect between unleaded from crude and ethanol from unleaded. Crude oil is over $90/brl and wholesale gasoline is only in the $2.20s/gal. Gasoline should be much much higher according to historic ratios. Now look at ethanol whole sale prices in the $1.70/gal. I would suggest that ethanol is doing a great job. Subsidies are obviously going to the consumer. At least when big oil passes it on because they receive the $.51/gal blenders credit.
Now take a look at historic corn prices, subsidies, and projected acres. http://www.mrci.com/pdf/c.pdf Its not like we haven't been at the prices before several times in the last 35 years before even considering inflation. Visit a number of university ag websites and figure out for yourself what it costs to grow an acre of any feedstock. Yield/acre. Why would anyone get into, let alone stay in farming. It sucks as a business. Pries are too cheep and when the prices go up, the subsidies start getting removed. Big Ag like every other BIG is inevitable. Get used to it.
Back to my point. I believe ethanol is fighting inflation at the pump and that grain prices, while high, are trading within historical ranges.

This is what will cause inflation:
http://www.mrci.com/pdf/cl.pdf

not ethanol that is actually keeping oil's downstream products, gasoline, from running sky high.
This is just another big oil (i.e. Patzek/Pemintal) funded report.

I think Tom has a very good point.! Good Job TOM

WHO THE HELL IS TOM?

WHO THE HELL IS TOM?

It is clearly the rise on the price of oil,from $14 a barrel in 1999 to $ 97 a barrel now what is taking all the other prices up ,just like it did in the 70s when OP

EC oil prices hikes brought inflation to world economy

Ethanol production is the way to go ,corn is just the beggining since sweet sorghum in usa west could yield more with half water use and marginal lands ,same in Mexico where all gasoline could be sustitute expanding sugar cane plantations,sweet sorghum,sweet potatoes and cassava,just like in the rest of Latin America rescuing sugar industry from death and saving millions of jobs
With India,Thailand,Phillippines,Colombia,Australia,Africa ,China and Europe competing for ethanol production they can save billions in oil,specially ramping up biodiesel production to power all trucks and delivery vehicles ,reducing more and more oil dependence
This chage is big and require bug investments but not doing anything would leave us in the hands of big oil companies to raise prices at their will,the same ones probably paying to blame ethanol for the inflation they have created
Great example is Brazil with no inflation due to freedom from oil imports because it develop ethanol production and distribution.Bravo Brazil,congratulations on a well done job!

On the corn as feed vs. fuel, did you know that 87% of the U.S. corn crop is fed to animals and that fermenting the corn to alcohol results in more meat than if you fed the corn directly to the cattle? We can actually increase the meat supply by first processing corn into alcohol, which only takes 28% of the corn mass (the starch), leaving all the protein and fat, creating a higher-quality animal feed than the original corn. Cattle fed Dried Distiller's Grains (with solids) actually gain 17% more weight and have fewer health problems than cattle fed corn directly.

So by fermenting the starch (which cattle use poorly), you increase the meat supply! And corn is a rather poor source for ethanol. It's only being used because it's so plentiful. For further information including *much* better energy crops to use, read Alcohol Can Be A Gas by David Blume or visit www.alcoholcanbeagas.com

His book is the best secular book I have ever read (and I've read a *lot* of books) and you can get it on Amazon.com

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