The Unseen: Ethanol Puts the Freeze on Ice Cream, et al
The seen: Your federal tax dollars pumping the life-blood through the domestic ethanol business.
The unseen: Higher prices for consumer goods. First, there's why my groceries are so much more expensive:
Amy Green’s Ivanna Cone ice-cream emporium in Lincoln, Nebraska, has already raised its prices for a small cone to $3.50 before tax, up from $2.95 a few months ago. She also estimates that she is paying $150 more a week for the butterfat that she uses in her ice-cream.But all of this can be traced back to agricultural subsidies for ethanol.The squeeze on ice-cream makers, chocolate manufacturers and pizza companies – all of whom use dairy produce as a raw material – is set to tighten as the price of a gallon of milk in the US – up 55 per cent in the past 12 months in some American states – is now the same as a gallon of petrol, with dairy prices accelerating faster than the cost of fuel.
This month, the price of milk in the United States surged to a near-record in part because of the increasing costs of feeding a dairy herd. The corn feed used to feed cattle has almost doubled in price in a year as demand has grown for the grain to produce ethanol.And then there's the impact on tortillas.
Mexicans who eat a traditional diet gain 50 percent of their calories, and 70 percent of their calcium, from tortillas and other corn-based products. Another expert reckons tortillas account for 40 percent of protein in such diets.But who's really making the money, behind the scenes? Why ADM, yet again!
[...]
A family of four eating a traditional diet consumes a kilogram -- 2.2 pounds -- of tortillas per day. A year ago, a kilo of tortillas in some areas of Mexico cost about 63 cents. By January, the prices in the same places had soared to between $1.36 to $1.81 per kilo -- a big chunk of the nation's $4.60 per day minimum wage. In short, low-income people found themselves priced out of the tortilla market, and forced into less-nutritious alternatives like white bread and ramen noodles.
Indeed, the same company responsible for rigging up the U.S. corn-based ethanol market is also profiting handsomely from soaring tortilla prices. Archer Daniels Midland, the leading U.S. ethanol maker and the world's biggest grain buyer, owns a 27 percent stake in Gruma, Mexico's dominant tortilla maker. ADM also owns a 40 percent share in a joint venture with Gruma to mill and refine wheat -- meaning that when Mexican consumers are forced by high tortilla prices to switch to white bread, Gruma and ADM still win.--
Related articles on ethanol:
How cash and corporate pressure pushed ethanol to the fore
http://grist.org/news/maindish/2006/12/06/ADM/
How Ethanol Inflates Food Prices
http://volokh.com/posts/1182040079.shtml
Gasoline Prices: Conspiracy or Plot?
http://www.reason.com/news/show/119300.html
