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Sunday, June 19, 2011

Okay -- Now, It's Getting Serious -- Ethanol Driving Up Price of Ice Cream

Link here.

The article is a human interest story on how the price of ice cream has gone up as a result of numerous global inconvenient truths.

But these two paragraphs caught my eye:
The 700-acre spread, home to 150 cows, mostly Holsteins, is where Toscanini’s ice cream begins. While the prices Hager receives for milk are the highest in more than two years, his costs are increasing faster. Hager supplements the feed he grows — corn and hay — with grain he buys. His grain costs have jumped to $27,000 a month, up $5,000 from a year ago.
Much of the increase is because of the rising price of corn, rooted in soaring crude oil prices and demand for ethanol, the corn-based gasoline additive. Corn exports to China also play a role; US farmers exported about 17 times more corn to China last year than in 2009.
It is not "demand for ethanol." It is the Congressional mandate for ethanol.

Ethanol-formulated gasoline is about a nickel/gallon cheaper. I don't think anyone would miss ethanol-formulated gasoline if it disappeared overnight. Filling a 20-gallon tank costs about $70; shaving off a buck (20 gallon x 5 cents --> $1.00) isn't much of a savings.

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