Ethanol Subsidies, are they worth it? It costs more to get a gallon of milk now than it does a gallon of gas!
July 24th, 2007 | by admin |Do government subsidies for ethanol need to stop? Corn producers who supply the ingredients for ethanol have been receiving money and incentives from the government to produce the fuel that is supposed to clean up the environment and reduce our dependence on foreign oil. It hasn’t happened thus far, and with new results about the environmental affects and the cost of other goods going up because of the lower supply of corn one has to ask the question, “Is it all worth it?”
Ice-cream makers frozen out as corn price rises
What’s the connection between ethanol, the biofuel produced from corn, and a cherry vanilla ice-cream?
Answer: the first is responsible for pushing up the price of the other.
This month, the price of milk in the United States surged to a near-record in part because of the increasing costs of feeding a dairy herd. The corn feed used to feed cattle has almost doubled in price in a year as demand has grown for the grain to produce ethanol.
Christina Seid, whose family have been making ice-cream at the Chinatown Ice Cream Factory for 28 years, said yesterday that she expected to have to raise her prices, along with all competitors in the short term. “We are holding out as long as we can, but prices will rise,” Ms Seid said.
Amy Green’s Ivanna Cone ice-cream emporium in Lincoln, Nebraska, has already raised its prices for a small cone to $3.50 before tax, up from $2.95 a few months ago. She also estimates that she is paying $150 more a week for the butterfat that she uses in her ice-cream.
The squeeze on ice-cream makers, chocolate manufacturers and pizza companies – all of whom use dairy produce as a raw material – is set to tighten as the price of a gallon of milk in the US – up 55 per cent in the past 12 months in some American states – is now the same as a gallon of petrol, with dairy prices accelerating faster than the cost of fuel.
When should the government be handing out money to certain industries? Should this ever occur? A lot of people struggle financially, or have problems getting an idea off the ground but they don’t necessarily depend on the government to fund it. I’m not saying it’s right or wrong, I’m really not sure. I do think it’s worth looking into though. What do you think?
By Jay on Jul 24, 2007
I’m sick of the government screwing up the economy because they think they know what’s best. The reason we started out with a free market is because the market (that’s all of us by the way) is smarter than the government.
They’ve screwed up royally again. They’ve simply cost shifted from one market where money saving choices abound to another where there aren’t a lot of choices when you’re living on a budget.
If I wanted to save money on gas, I could walk, ride a bike, ride the bus, car-pool, drive a different vehicle or drive differently.
What exactly are my choices when it comes to a gallon of milk? Sorry folks, the best choice I’m aware of for a 2-year old is whole milk.
Old T-Paw has spent the last several years pushing this ethanol garbage and he’s screwed everyone with higher food costs. Damnit, I voted for him too. The democrats are no better though, they’re all over this sustainable energy crap.
Drill through the damn ice already and stop taking food from the mouths of our children!
By Chris on Jul 25, 2007
Hasn’t a gallon of milk almost always cost more than a gallon of gas?
Anyway, I’m with you on this one. I’m not an economist, but I remain unconvinced that the government needs to manipulate the prices of any good or service.