Food Costs

Ethanol is reducing food costs by lowering gas prices.

According to one analyst from Merrill Lynch, ethanol lowers gas and oil prices by 15 percent. Another study by Iowa State University found that ethanol reduces gas prices by at least 29 to 40 cents per gallon.

According to the United Nations, global food prices fell in March 2015 to their lowest in almost five years as supplies for most commodities, including cereals and meat, remained robust.

The U.N. Food and Agriculture Organization’s (FAO) price index, which measures monthly changes for a basket of cereals, oilseeds, dairy, meat and sugar, is at its lowest since June 2010. High global production and low crude oil prices have helped cap food prices for the past year and the index has been declining since April 2014.

Rising energy costs play a dominant role in the price of food because raw ingredients like corn comprise only 20 percent of food prices. The other 80 percent is shipping, packaging, processing and advertising costs.

foodcosts

A driver who buys E10 can save at least $0.10 a gallon and that can add up to hundreds of savings annually. But eliminating ethanol from the U.S. fuel supply would instantly cause gasoline prices to soar an additional $1.10 per gallon more than the current price, according to economist John Urbanchuck.

When the average animal travels more than 1,000 miles from producer to plate, it’s clear that oil and gas prices are pushing up the cost of everything. Consumers who choose ethanol blends at the pump will save money compared to those who opt for conventional gasoline. We expect Nebraska motorists to save nearly $70 million by using ethanol.

Even with increased demand for corn for food and fuel, the net output of feed corn and distillers grains has increased 26 percent in the last five years. There is enough corn grown in the U.S. to meet ethanol demand, increase exports and still stockpile a 10 percent surplus. Nebraska farmers and ethanol producers are providing food, feed and fuel for Nebraska and the nation.

The Advancement of Ethanol in Nebraska

http://www.nebraska.gov/policies/