Ethanol trickle down continues – expect higher costs

The Big Farm payday from the government continues to have a negative impact, now with the price of dairy rising. Alternative energy research and development makes all the sense in the world but corporate welfare like this, without planning and without researching the full impact, is just another example of the Bush administration hard at work. The GOP has a belief that if you throw millions and billions of dollars at a problem, it will somehow all work out. The fly in the ointment has consistently been that they never think about the full consequences of their policies beyond wads of cash to friends.

U.S. retail milk prices have increased about 3 percent, or roughly a dime a gallon, this year, according to the U.S. Department of Agriculture.

But University of Illinois dairy specialist Michael Hutjens forecasts further increases of up to 40 cents a gallon for milk over the next few months, and up to 60 cents for a pound of cheese.

Again, it’s the middle class footing the bill for another failed GOP program.

Hutjens and others said higher gasoline prices have increased the costs of moving milk from farm to market, and corn — the primary feed for dairy cattle — is being gobbled up by producers of the fuel-additive ethanol. The USDA projects that 3.2 billion bushels of this year’s corn crop will be used to make ethanol, a 52 percent increase over 2006.

Ethanol has increased the average American’s grocery bill $47 since July, and Iowa State University study concluded.

An American in Paris, France. BA in History & Political Science from Ohio State. Provided consulting services to US software startups, launching new business overseas that have both IPO’d and sold to well-known global software companies. Currently launching a new cloud-based startup. Full bio here.

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