Currently, about 40 percent of the U.S. corn crop is used in the production of ethanol. Corn prices rose as a result of the government creating an artificial, additional demand. As a result of higher corn prices, many farmers grew more corn and fewer other crops, such as wheat, which, in turn, caused the prices of those other crops to rise because of lower production.

Cornheap (Photo credit: Wikipedia)
The government mandates that ethanol be added to gasoline. I don’t like that word, mandate. Better words are: demand, require, rule, dictate, impose. “It’s the government, stupid,” to paraphrase Bill Clinton. And it’s the unintended consequences of that government edict that are causing the prices not only of corn but wheat, and eventually, meat, to rise.
As Rahn explains:
The drought is resulting in a much smaller corn crop, but by law, much of the remaining corn must be used to produce ethanol, resulting in even higher prices for corn, which reached a record high last week.
Higher corn prices drive up the price for other grains that are affected by the drought, resulting in higher prices for almost all grains. Corn and other grains also are used to feed animals. This means it is more costly to produce meat, which, in turn, will cause meat prices to rise rapidly.
Other unintended consequences of ethanol mandates are the impact of our drought on poor people around the world. Since the US produces, in non-drought years, about 40 percent of the world’s corn, when prices rise here they also rise around the world. Poor people spend most of their miniscule incomes on food and when food costs go up, they are impacted enormously, forcing many of them into starvation.
And all because some greenies in Washington want cleaner air.
But even that part of the plan isn’t working. As Rahn explains:
Now the inconvenient facts: Recent studies show that the total carbon-dioxide emissions from growing, harvesting, processing and burning corn as ethanol are much greater than those from oil and gas production and use. (emphasis added)
There it is: government insanity causing pain and misery, all in the name of cleaner air. What a travesty!
Latest Comments