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The Whole Truth

By Staff | May 24, 2011

Much is said these days about the cost of living how every time you look, let alone blink your eyes, it seems, gasoline prices are climbing steadily, grocery prices are on the rise and other prices for goods and services are rising right along with everything else.

So, whom do we blame?

If we have to point fingers, I’d suggest we start by a little process of elimination. Let’s look at the prices that are rising like a helium-filled balloon.

A couple of days ago, I came across a report from the United States Department of Agriculture that was trying to dispel some of the myths that are running rampant around the country. For many of these myths, the American Farmer is catching the blame and being pointed at as the guilty party.

But, that is far from the truth.

The USDA tells us in its study that the price you pay is not going into the farmer’s pocket not by a long shot.

For example:

That two-liter bottle of Diet Pepsi you bought cost you 99 cents and a deposit. The farmer that raised the corn for the high-fructose corn syrup sweetener he got about nine cents for his work.

How about a box of Corn Flakes for breakfast at $4.39? Old McDonald can retire on the eight cents he got out of that.

Hey, it’s grilling season but that top sirloin you’re dreaming of might set you back about $8.49 a pound. Out at the feedlot, that steak netted our producers a whole $1.13.

While we’re at it ethanol produced from corn is not the cause of the rise in gasoline prices in any sense of the imagination.

According to the Congressional Budget Office, increased ethanol production caused a mere one-half of a percentage point rise in the price of food between April 2007 and April 2008. The truth be know, the increased production of ethanol actually saved you and me around $48 billion when we filled up at the gas pumps in 2007 alone.

When you tie the cost of food to ethanol costs, it turns out that for every dollar consumers spent to buy food, they were able to save between $5 and $8 per fill in gasoline costs.

The black and white, whether you want to believe it or not, is that through farmers producing corn for ethanol, we are not paying $4 a gallon for our gasoline here in our corner of the world just yet, despite the wishes of some petroleum jobbers who would run the price up for their own pockets, when other jobbers, getting fuel from the same pipeline and same terminal, can sell the same gasoline for almost 15 cents a gallon cheaper.

The forces driving up the prices of our fuels are those who capitalize on the misfortune of others those who like to speculate on gloom and doom. Sadly enough, there’s enough of that garbage flowing in the world as we speak, so anything that can be done to reduce it in any way is a breath of fresh air – something that the use of more ethanol could actually help create.