What effect does fuel ethanol have on food prices?
Estimates of the impact of biofuels on food prices vary widely. Many factors contribute to high retail food prices, including corn ethanol production. Other factors contributing to rising global food prices include: Higher costs of fossil fuels used to transport food to retail outlets, Increased demand as emerging economies grow and populations adopt better diets and eat more meat, Adverse weather in parts of the world and droughts leading to poor harvests, Devaluation of the dollar, which may reduce importing costs and increase export buying, Reduced global grain supply and increased demand for U.S. agricultural exports, Hedge funds and index funds buying of grain and oilseed futures, Growth in foreign exchange holdings by major food importing countries, and Reduction in global agriculture research and development slowing pace of yield increases. The majority of U.S.-produced ethanol is currently made from field corn, which is grown to feed livestock. The production process yields cop
