After dropping from $2.50 to just over $2.00 during the brunt of the recession four years ago, beef prices are soaring again. In fact the cost of a pound of ground beef spiked to an all-time high of $3.51 over the Memorial Day weekend. Steak prices are running even higher – at $4.81 per pound.
What’s behind this spike? Ethanol subsidies (a.k.a. government interference in the marketplace).
More than a quarter of the nation’s corn crop is being used to satisfy a federal mandate requiring 14.4 billion gallons of ethanol fuel to be purchased and blended into gasoline this year. And guess what, that number goes up every year. That means higher prices on meat and dairy products (which rely on corn to feed the animals that produce milk, poultry, pork and hamburgers).
This website has railed (repeatedly) against ethanol subsidies – which are supported by leaders in both major political parties and virtually every candidate for president (thank you, early voting Iowa).
Why do we hate them? For starters corn is horribly inefficient as a biofuel – and the costs associated with its manufacture and blending have actually increased gas prices (in addition to increasing food prices). So by subsidizing the corn ethanol market via a maze of subsidies, tariffs and mandates, government has not only failed to solve the problem it set out to solve – it has compounded that problem and created a host of new ones.
We’ve said it before and we’ll say it again it’s time to end the ethanol mandate … and get government out of the alternative fuel business altogether.