We’re hearing plenty of arguments from both sides lately about whether ethanol is to blame for high grocery prices. A new study finds both sides may be at least partly right. The study from the University of Nebraska-Lincoln says ethanol production is responsible for about 40% of the recent rise in grain prices but for very little of the hike in food prices.
U-N-L agricultural economist Richard Perrin says ethanol accounts for about 1.2% of the rise in domestic food prices because most of the boosts in corn prices are not passed on to consumers.
In less developed parts of the world though, Perrin says ethanol likely did have a bigger impact on food costs because grains account for a larger portion of a person’s diet there. He adds, ethanol could account for as much as 15% of the food price hikes in poor nations overseas.