Have Gas Pains? It Could Be Worse

If you’re still on the fence about the benefits of ethanol, a new study should provide some eye-opening information.

According to the Center for Agricultural and Rural Development (CARD) at Iowa State University, researchers there found that in 2010, using ethanol decreased the cost of gasoline by an average of $.89 per gallon nationwide.

With gas already well over $4.00 a gallon in many larger cities, one can only imagine how much folks in, say, Chicago would be paying.  As of this posting, the average cost of regular grade unleaded in the Windy City is $4.511, the highest in the nation.  As much of a hardship as that price is for many consumers, if you tack on nearly another dollar per gallon, driving simply becomes cost prohibitive.

Blender pump in Sullivan, IL (Photo courtesy Tricia Braid, IL Corn)

One last nugget from the study:  the researchers concluded that if ethanol production came to an immediate halt, “the estimated gasoline price increase would be of historic proportions, ranging from 41% to 92%.”  Note that the researchers say the increase WOULD be of historic proportions–not ‘might,’ ‘could,’ or ‘may.’

That means, in Chicago, gas prices could range from $6.36 to $8.66 per gallon.  And there’s nothing in your pharmacy that will get rid of those gas pains.

Read Full Post »

By Jove, I Think They’ve Got It!

Yesterday, the Associated Press ran a story on food prices.  Ordinarily, that in and of itself is not newsworthy, but it was the headline that caught our attention:

Experts: Farmers not to blame for high food prices

Of course, this is something folks in agriculture have known all along.  Unfortunately, farmers have been singled out in the past by certain trade groups, politicians, members of the media and opponents of ethanol.

You can read the whole story for yourself, but here’s a short excerpt:

“[E]experts say those prices have little to do with what shoppers pay at the grocery store, and farmers and ethanol producers aren’t responsible for recent increases in the cost of groceries.

‘It’s a whole slew of things that have influenced that price,’ said Chad Hart, an agricultural economist at Iowa State University. He ticked off some of them: ‘When you look at the cost of our food, it is related to the cost of corn, soybeans and wheat and cattle but also the cost of oil, gas, diesel and unrest in other parts of the world.’”

Further:

“The U.S. Department of Agriculture report released last month that broke down where each dollar spent on groceries goes. Farmers received an average of 11.6 cents per dollar in 2008, the latest year data was available. That was down from 13 1/2 cents 10 years ago and from 14 1/2 cents in 1993, the USDA report showed.

The rest of the money goes to processing, packaging, transportation, retail trade and food service, which includes any place that prepares meals, snacks and beverages for immediate consumption including deli counters and in-store salad bars.”

Kudos to the reporter, Michael J. Crumb, for looking into the story and getting it right, and not just offering up a convenient scapegoat.

Follow Illinois Farm Bureau – News & Issues on Facebook

Read Full Post »