Top 3 Graphs That Prove Ethanol Does NOT Raise Food Prices


ethanol food prices

Just about every time we write a post about ethanol- be it about a 2000 hp ethanol-fueled hypercar that makes 400% more power than the gas version but still gets the same MPG or about the US military switching its mobile units to biofuels– someone starts harping about ethanol raising food prices. Despite the fact that the farmers who make the food will tell you that energy (read: gas and oil) is the biggest factor in food costs and the fact that the whole food vs. fuel “debate” (if you can call it that) was started by the science-deniers at the AAPS, however, the idea that ethanol raises the price of food is still “out there”.

A few weeks ago, Fuels America (a pro-RFS lobbying group) released the following graphs- which I’m going to call my “Top 3 Graphs That Prove Ethanol Does NOT Raise Food Prices”. Enjoy!


1. Price of Ethanol is Down, Food Prices Still High


The price of corn is the lowest it’s been in three years, yet food prices have not come down from corn’s historic, 2012 highs. This year, the USDA is forecasting a record breaking corn crop in the US. In fact, back in October they updated their corn inventory estimate by 25% (!). Accordingly, we have reached a three year low in corn prices- with corn trading at under $4.50 a bushel at the beginning of November, compared to the 2012 peak of $8.49.


2. Only 16% of Food Prices Determined by Farms

Food dollar

Only 16% of grocery costs can be traced back to farm inputs, like corn or wheat. The rest goes to costs like energy (oil and gas), transportation (again, oil and gas), packaging (oil-based plastics), marketing, and labor.


2=3. Oil is Driving Up Food Prices

oil prices v. food prices

According to the World Bank, oil, not corn, is what has been steadily driving up global food prices over the last decade. Sure, corn is a factor- but it’s just one of many, complicated factors that goes into just 16% of grocery costs. Crude oil and refined fuel prices, meanwhile, remain the number one determinant of global food prices. The cost of energy from oil is integral to so much of the 84% we discussed in graph no. 2, above, that when the price of oil goes up, food prices must follow closely behind.


Sources | Images : Food Politics, via Fuels America, NASDAQ, World Bank.

About the Author

I’ve been in the auto industry 1997, and write for a number of blogs in the IM network. You can also find me on Twitter, at my Volvo fansite, or chasing my kids around Oak Park, IL.

  • edsel ford

    Ethanol turns acidic.

    • That’s right- and gasoline turns to toxic goo if you leave it sit for too long.

      • edsel ford

        Sure it does, yeah.

        • You do realize gasoline gels over time, right?

          • GregS

            Not as quickly as E10

          • edsel ford

            I would rather clean a carburetor that has gasoline gell/varnish than one with aluminum oxide corrosion from ethanol blended fuel.

          • Carburetor? What is this, 1973?

          • Greg Sheldon

            Plenty of old cars out there Jo, not to mention motorcycles, lawn mowers, snow mobiles, weed eaters, chain saws etc

          • PrezNixon

            Are you seriously still buying mowers, snow mobiles, weed eaters, chain saws, etc that are not E10 certified? Do you realize that reputable small motor builders have been making E10 certified small engines for more than 2 decades?

            All gas cars have been E10 certified since 1985. Do you ever wonder why some cheap companies continue to sell motors that they know will fail with E10, forcing you to buy another one from them?

          • PrezNixon

            I’d rather use the proper fuel stabilizer with either fuel, and not have to make either repair. But that’s just me taking personal responsibility for the proper storage and maintenance of my own property….

        • PrezNixon

          Both gasoline and ethanol fuels need the appropriate fuel stabilizer if an engine is not used regularly. For gasoline, a product like the classic Stabil for gas is required. For ethanol, a product like Stabil Ethanol Formula is needed. You can find this at Walmarts and in parts stores.

          Failure to use the proper fuel stabilizer with pure gas in a motor is User Error. Same for failing to use the correct fuel stabilizer with a fuel that contains ethanol.

          You would be laughed out in shame from any small engine repair shop if you tried blame the gasoline instead of yourself, for repairs caused by you failing to use fuel stabilizer.

          The same is true for storing fuel with ethanol. You must use fuel stabilizer, and if you fail to use an ethanol fuel stabilizer, don’t blame the fuel, blame the user who failed to use ethanol stabilizer.

          All the product information is available on Stabil’s website, or on Walmart’s website, etc.

  • edsel ford

    Do you think that you could put out some unbiased graphs, not the ones that promote a particular agenda.

    • In other words, you’d like me to fabricate some graphs that promote your opinion?

      • edsel ford

        No, just some graphs that tell the truth, not too much to ask.

        • The “truth”, as you agree with it, I know what you mean … I’ve read enough of your comments on here to understand what you really mean. You should be proud of the hole you’ve buried your head in. It really must be magnificent, since you’ve decided to spend so much time in it.

          • edsel ford

            You should try to be a little more tolerant of those with unbiased opinions. BTW ethanol fuel costs more per mile to run.

          • You don’t have an unbiased opinion. That’s clear. It’s OK to not have a biased opinion, but claiming that your nonsense is bulls*** that, I’m sure, you’re used to being called out on.

            BTW ethanol does not necessarily cost more per mile to run- that’s only true at certain pressures and efficiencies. At high boost, say 30-odd pounds of boost in a turbo engine, the thermal efficiencies are higher than gasoline, which is mostly useless at that boost/power level. The thermal efficiencies climb high enough to overcome the difference in BTU density between ethanol and gasoline, which is why a car like a 1500 HP alcohol-fueled dragster can get the same mileage on ethanol as a similar 500 HP gasoline fueled motor.

            It’s cool if you don’t know this stuff- nobody expects you to have 16, almost 17 years of experience building and racing alcohol engines … but your refusal to admit the possibility of being wrong is what makes you particularly annoying when you get going.

            It’s too bad. You seem like you might have the potential to be OK in person, you just seem to become a PITA behind the keyboard.

          • Greg Sheldon

            Jo, it’s all well and good that engines with certain pressures might be more efficient on high ethanol blends, but the trouble is that most of us are stuck with our present vehicles. My 2004 F150 gets 10% worse mpg on E10, I can’t just change the pressures in my engine to fix the 10% loss in mpg. It’s also not worth trading in a $7500 truck to buy a $40,000 that might get 10% better mpg.

          • PrezNixon

            Greg, Exactly 10%? Do you have the fuel logs to prove that? Because your results sound fabricated, or at least fudged, like rounded up to the nearest 10% just to make a nice round number. In reality, it has been shown over and over that properly functioning cars lose only a fraction of that much MPG on E10 compared to E0, and while gaining a small amount of increased power.

  • Greg Sheldon

    And why is the price of corn the lowest in 3 years? Mainly due to the EPA tentatively lowering the amount of corn ethanol required for fuel blending next year.

    • edsel ford

      Wasn’t the EPA supposed to raise the amount of ethanol to 15%?

      • Greg Sheldon

        They approved the sale of E15, but the only way to blend the amount required by the RFS is to exceed E10 on a nation wide level and this has sparked a big controversy about how safe E10 is

        • Rockethead.fred

          That a load of BS the Controversy on E10, pull down my engine and found nothing wrong, even try E100 with a few engine mod to the ECU and it run like a rocket.
          The higher the blend ethanol is the clear the engine part are no carbon build up on the piston, oil run clear after 8000 miles.

          • Bob_Wallace

            Perhaps your problem is too many years of sniffing gas, Mark. That would explain it.

          • Rockethead.fred

            Someone doesn’t like petrol, ethanol, bio-diesel, or EV, its mind confusing for them to accept one of the options, none of which make logic scents to them.

          • Greg Sheldon

            Menat to say controversy on how safe E15 is, I will edit the post above

        • It’s only a “controversy” to the type of people that think teaching evolution in a science class is a “controversy”.

    • Yet food prices stay high …

      • Bob_Wallace

        Food prices are very “sticky” and not very dependent on the cost of the food in the food (as your article points out).

      • Greg Sheldon

        Your graph shows a “Food Index” not a “Corn or corn reflated food index”. When corn prices come down, I bet prices for corn tortillas fall fairly soon after that.

        • PrezNixon

          Corn, corn products, and Corn Syrup is everywhere in food. There are dozens of food ingredients that are made from corn that you don’t even know from reading the label that they are made from corn. Look at your grocery receipts, prices of corn tortillas indeed have not fallen.

        • Nixon’s right- that’s a pretty ignorant statement.

    • PrezNixon

      Greg, the price of corn has been dropping since the peak price way back in 2012, and has been dropping all year long. The EPA just recently announced the proposed policy. Without a time machine, it is impossible for the EPA’s statement to impact prices paid for corn long before the EPA acted.

  • Bob_Wallace

    Perhaps we should be looking further down the road re: the cost of food and ethanol.

    As population levels rise and as climate change (probably) cuts into our ability to produce food we may be badly served if we’ve grown to depend on corn ethanol for transportation fuel.

    Given the low EROEI for corn ethanol (~1.3) we’re not expanding our energy supply very much with this approach. In fact, if we’re putting in 1 part energy and getting back only 1.3 parts energy are we really recovering the labor, fertilizer and equipments costs? Or are we paying for this very small increase in energy with tax dollars?

    Were we getting back 3x, 5x the energy we’re putting in then it might make sense (for a while).

    It might be better to use our tax dollars to improve fleet mileage. Buy more clunkers/low MPG vehicles off the road and provide more subsidies for EVs. Use the “1” for transportation and save the “0.3” via efficiency.

    BTW, our EV subsidy program sucks. If you don’t pay $7,500 in federal income taxes you can’t use the $7,500 tax credit.

    We should be doing a straight rebate for all buyers. That way working families could afford a budget-friendly EV. Working people could buy the Mitsubishi i-Mev for about $16k. Even less with state incentives. That would make a big difference to people struggling with gas burners needing frequent repairs to stay on the road.

    • Nathen.Gavon

      I agree with your first point but, there is area were compete for the same land, new wind/solar farms are now taking the place of food production, which limit food and ethanol production.

      EV are to costly to buy, installing solar panels to off set the price will take a life time to repay for those on low income. I don’t think you could move the Army in an EV.

      Low MPG vehicles have been reached its best efficiencies for the next decade

      State incentives are not the answer look what happen to solar power, cost of energy when up because of state incentives. Beside EV have limited range.

      • Bob_Wallace

        Another fail, Mark.

        • Nathen.Gavon

          What a strange person?

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