Video: Ethanol Debate on Food Prices

With ethanol production increasing, the price of corn – the fuel’s primary ingredient – has also risen. As a result, more people are now blaming ethanol for a rise in food prices. However, General Motors (GM) reports that studies indicate the price of gasoline has twice the impact on the cost of food than the price of grain, due to the energy it takes to process, package and deliver corn for sale to consumers. In addition, the National Corn Growers Association indicates U.S. farmers have prepared for the growing ethanol demand by planting an estimated 93 million acres of corn this past spring. Due to this increase, GM officials report there is an abundance of corn to supply both food and fuel needs. Currently, standard vehicles can operate on fuel mixtures with up to 10 percent ethanol, while Flex Fuel vehicles use up to 85 percent ethanol.

Gasoline production in the U.S. reached an all-time high during the first half of 2007, according to an American Petroleum Institute (API) report. API’s “Monthly Statistical Report," released on July 18, indicates production of 8.9 million barrels a day and strongly recovering gasoline imports during the second quarter helped the industry produce record highs between January and June 2007. Gasoline deliveries during that period totaled more than 9.2 million barrels a day. API officials say these record gasoline supplies can also be attributed to the long-term expansion of existing refineries.