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Originally Posted by shovel
Yes, all corn based products inflate each's other' price. I'm not entirely sure I understand what part of that makes fuel ethanol not OK while floor wax and product packaging and kitty litter are OK.
Of those things, if corn based floor wax makes your grocer's building maintenance costs lower vs. another impossible-to-eat alternative source, then the also-corn-based products in that store will cost slightly less.
Likewise if the cost of fuel for the farmer, for the grocer, for the butcher, for the employees of those folks, etc is cheaper, then the prices of everything they sell can also be cheaper.. meanwhile all of the consumers can take the >5% less they're spending on fuel and buy more stuff while they're at it.
So as illustrated above, we spent an estimated 11 billion on fuel corn to save an estimated 34 billion in fuel costs. If you're going to talk about the "inflated cost of corn products" then you need to see the other side of that, the deflated cost of literally every product that relies in any way on internal combustion engines. Including corn itself, which is harvested by internal combustion powered machines and delivered to market similarly. Using figures previously noted in this thread, if the food price index rose ~4% and 5% of that increase could be blamed on fuel ethanol's impact on the price of corn, then 5% of 4% is 0.2%. You're seeing about a 0.2% increase in food price index based on corn ethanol.
Likewise if gasoline is $3.80/gallon but *would* be $4.00-$4.15/gallon without ethanol's presence in the fuel market, that's more like a 5+% decrease in fuel price.
Going with simple, front-end dollar amounts, according to Bundle.com we spent around $2200 per household on gasoline in 2009 and we spent around $6500 per household on food.
5% of $2200 is $110 and 0.2% of $6500 is $13.
Based on this quick estimate, we save about a hundred net bucks per year per household because of corn derived fuel ethanol at face value.
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Very reasonable response.
For me, the difference between ethanol and floor wax / kitty litter, etc. is that the wax and kitty litter will either survive or fail based on good old fashioned economics. Consumers can either choose to purchase those products or not. We don't have that opportunity with ethanol and because it's use is mandated by one means of another. To make matters worse is the fact that the kitty litter and floor wax may be 5% more expensive due to ethanol. LOL
So if we have saved 5% in the per gallon cost but decreased fuel efficiency by even 3% (I think more), then we are netting a 2% savings or $44 (2% of $2200) per year.
The pure truth to the matter is that we could sit and debate and evaluate where we save and where we pay more due to ethanol / corn. The fact of the matter is that if it is truly worthwhile then the market will accept it.....perhaps slowly at first, but it will be accepted. That has not happened so it is slowly being mandated and I fear that the true COST of ethanol will be that it could very well be the biggest factor that keeps us from finding a more realistic long-term renewable fuel source.
There have been some great discoveries in its development that will prove useful, but ethanol is not the answer.