(Posted by John.)
This is interesting, and it rings true to me:
According to a new analysis of food, energy and corn prices conducted by John Urbanchuk of LECG, LLC, "rising energy prices had a more significant impact on food prices than did corn." Rising energy prices have twice the impact on the Consumer Price Index (CPI) for food than does the price of corn, according to the report.
Ethanol has been getting a lot of blame for rising food prices -- including the worsening (and it was already bad) plight of Mexican poor, who can't afford to eat tortillas as the price increases. But there have been a lot of pressures on the price of corn grains, including declining reserves, and most importantly (if this study is to be believed) increasing energy costs.
None of this means that ethanol hasn't played a role, but if this study is correct then the role is smaller than some have been claiming.
