April 11, 2008

$100 oil and your food bill

A report released today by the Texas A&M Agricultural and Food Policy Center says that consumers can thank higher oil prices for their rising food bills. This isn't a surprise to a lot of corn growers, but it is nice to have some third-party confirmation.

The report, “The Effects of Ethanol on Texas Food and Feed” examines the food and fuel argument and finds that relaxing the Renewable Fuels Standard would not result in lower corn prices for livestock and poultry feeders in Texas. The study was requested by the state's governor because of the increasing noise in the state about the impact of increasing biofuels production on Texas agriculture and its overall economy.

If you don't have time to read the whole report, the executive summary is good -- and here's a good quote from it:

The underlying force driving changes in the agricultural industry, along with the economy as a whole, is overall higher energy costs, evidenced by $100 per barrel oil.

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