Dear editor:

The following comments give a better look at the real reason for food price increases (Drovers Alert Oct. 18, 2007).

  • ONLY the oil companies get the subsidies as an incentive for buying more ethanol. Not ethanol producers, not corn producers, only oil companies!
  • The following article can be found in it's entirety in Business Week, Oct. 1, 2007: “Big Oil’s Big Stall On Ethanol: Even as it pockets billions in subsidies, it’s trying to keep E85 out of driver’s tanks.”

For some industries, the prospect of $3.5 billion in federal subsidies now, and double that in three years, might be a powerful incentive. But not, apparently, for the oil industry, which is seeing crude oil prices soar to record highs. Despite collecting billions for blending small amounts of ethanol with gas, oil companies seem determined to fight the spread of E85, a fuel that is 85% ethanol and 15% gasoline. Congress has set a target of displacing 15% of projected annual gasoline use with alternative fuels by 2017. Right now, wider availability of E85 is the likeliest way to get there.

  • Look at the Producer Price Index and you will find significant increases in gasoline, increasing retail costs as high as 40 percent.
  • Corn has not jumped that high. Now that the corn producer is making a little more money, are meat producers are crying foul?
  • Who is really behind the bad rap on corn and ethanol? Are Big Oil lobbies behind the half truths?
  • Big Oil is about to become extinct over the next several decades. Big Oil sees a challenge and a threat to their industry, just like the whalers did when their market share started dropping. When whale blubber processed for oil was the energy king in the early 1800's, they had the corner on the market for oil lamps. When oil was discovered in Pennsylvania that all changed. The first car engine was designed to run on alcohol. The world now evolves around a petroleum based economy. 
  • Come on Drover's, look at who is making the big profits - Big Oil. They collect $.51 cents for every gallon of ethanol they buy and blend. Ethanol is 40-50 cents cheaper than gas. They can, and are blending ten percent (10%) ethanol in all gasoline sold. So in many cases Big Oil can make a dollar more for every gallon of gas sold, adding billions more to oil companies’ bottom line.
  • By the way, a box of corn flakes at the grocery contains less than a nickel's worth of corn. Transportation, advertising, and packaging cost (not corn) increases the overall retail price. Everything in the production of cereal in some way is touched by the need for gasoline, from the farm gate to the grocery shelves
  • It really amazes me that editors of some publications don’t get the total picture, while many other print media publications and broadcast companies are digging, looking for the real reason, increased fuel prices!

I hope these comments will enlighten the public about the true reasons for food price increases.

Don Martin
President
Agri Fuels, LLC
Brandenburg, Kentucky