…says a new article by Russell Redenbaugh & James Juliano. It doesn't cover much new ground, but it's worth thinking about. The key idea:
"Ethanol policy mandating that corn and oil become substitutes has forced these two very different supply curves to become one. The much larger global oil market expropriated the supply curve of the U.S. corn market. In short, oil markets now set food prices. This unintended consequence can be seen in global commodity markets."
No doubt Congressional supporters of our ethanol policy would tell us that it "helps American farmers and working families." More evidence, if we needed it, of the wide gulf between political rhetoric and economic reality.