Ethanol Responsible For Higher Costs

Former USDA Economist: Ethanol Is Responsible For Higher Costs
Keith Collins, former USDA chief economist, in an economic analysis said the increase in corn demand due to ethanol, is rising faster than growth in corn yields per acre, and sets up tight corn supply and demand scenarios in the future.

According to FeedStuff.com, Collins wrote the report, “The Role of Biofuels and Other Factors in Increasing Farm and Food Prices” as an economic advisor for Kraft Foods.  He also submitted the paper to the Environmental Protection Agency as part of its request for comments regarding Texas’ renewable fuels standard waiver request.

“So long as that situation continues, corn will have to attract acreage from other crops to meet its expanding demand.  This shift will mean higher prices for all crops that compete, directly or indirectly, for acreage with corn,” Collins said.

Recently, the USDA stated that biofuels policy has had very little effect on food prices, as little as 2% to 3% by their estimates.