The Volokh Conspiracy's Jonathan Adler looks at the effect increased demand for ethanol is having on the price of corn. And at the effect that has on any number of other things.
The Washington Post reports, the federal government's love affair with corn-based ethanol is further increasing a wide range of food prices.
Beef prices are up. So are the costs of milk, cereal, eggs, chicken and pork.
President Bush's call for the nation to cure its addiction to oil stoked a growing demand for ethanol, which is mostly made from corn. Greater demand for corn has inflated prices from a historically stable $2 per bushel to about $4....
cattle ranchers have to pay more for animal feed that contains corn. Those costs are reflected in cattle prices, which have gone from about $82.50 per 100 pounds a year ago to $91.15 today.
"Anybody that knows anything about the marketing of corn knows that when you raise the price of corn you are going to create problems in all of the markets that use corn," said Ronald W. Cotterill, director of the Food Marketing Policy Center at the University of Connecticut.
...as corn prices rise in response to the incrased demand for corn, farmers are becoming less willing to let fields lie fallow or enroll their lands in various conservation programs.
In parts of the country, this could have a significant negative effect on wildlife habitat, particularly for migratory birds. So, even if one makes the (dubious) assumption that there are significant environmental benefits from switching to corn-based ethanol, such as a potential reduction in certain emissions, there are significant environmental costs as well.
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