A consulting firm working for the American Farm Bureau says ethanol is holding the price of gas down by 10 cents a gallon.

The Wall Street Journal reports on how biofuels are keeping oil and gas priced 15% lower than otherwise.

A U.S. DOE official says “transportation energy, is now the No. 1 issue facing the United States”; “ The U.S. economy is completely dependent on transportation.”

Drought in Australia cut global wheat production. Floods in Bangladesh affected rice. The world’s population is growing and demanding more and varied foodstuffs. Economic growth in countries such as China results in changing eating patterns. Traditional diets based on grain staples are expanding to include luxury items like beef and pork. …and then there is the ethanol and biofuel effect…

If you just went by the headlines, you’d think that the solution to end world hunger is to stop making ethanol. So if you imagine a world with no ethanol, who’s to say food prices in developing countries might not be higher?

A 2007 study estimated that for every 30 percent increase in the price of corn, retail food prices increased by only about 1 percent… There was 2 cents of corn in a 1 pound box of corn flakes in 2001. Now double the price of corn. Now there is 4 or 5 cents of corn in every 1 pound box of corn flakes. There's 5 cents of corn ( at today's prices ) in a 1 pound package of tortillas. The rest of the cost for the food is for manufacturing, marketing, and transporting the food.

Quite the eye opener in my opinion.

-John