Just ahead of the Thanksgiving holiday in the US, the Renewable Fuels Association (RFA) said that turkeys are cheaper this year in spite of record ethanol production, which should serve as an evidence to end the “food versus fuel” debate.
The industry group last week released a report that examines the effect of ethanol expansion on food prices. The conclusion of the study, conducted for the RFA by Informa Economics IEG, is that “retail food prices were not impacted in any demonstrable way by expansion of US grain ethanol production under the Renewable Fuel Standard (RFS) over the past decade.”
According to the report, ethanol expansion was just one of a number of factors pushing up corn prices over the past 10 years. During that period the consumer food price inflation has in fact decelerated.
The RFA said that, based on US Department of Agriculture (USDA) data, overall grocery prices are now about 2% below their levels a year ago, while prices of poultry products like turkey are 1.5% lower. At the same time, fuel ethanol producers are expected to use record amount of corn in 2016, up by some 3% from 2015.
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US study says ethanol not driving food prices