Fast-food customers consume corn in two ways. The hamburger and chicken they eat in their meals come from an animals raised on corn. The fuel in their automobiles is 10% ethanol, so the ethanol and animal are competing for the same grain.
The US has a finite amount of corn, so the way crops are allocated and used matters greatly. Ethanol uses a significant amount of the annual US corn crop. This has been the case since a 2005 law required ethanol be added to gasoline.
Fuel makers generally add ethanol to gasoline regardless of mandates because it is far cheaper than petroleum. This drives up the price of corn significantly. Higher corn prices in turn drive up the price of meat. The more corn used for ethanol the greater the pressure on food prices.
Wendy’s franchise owner Ed Anderson wants the law repealed. He believes each of his four Wendy’s restaurants pay $30,000 per year and says in a troubled economy this is not acceptable.
The US Environmental Protection Agency (EPA) conducted a study that determined that repealing the law would only change the price of corn by a few cents – not enough to have much of an effect at all.
There is a contingent of biofuel hopefuls who envision a future where other biofuels replace corn ethanol. Bob Dinneen of the Renewable Fuels Association says the future must include fuels that do not come from food crops. Until these fuels materialize, however, the tension between biofuels and fast-food will continue.
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Join the Discussion4046 total comments so far. What's your opinion ?
Given the amount of fallow farmland in the US, there should be no problem with raising enough crops nationwide to produce ethanol based fuels without affecting food prices at all, and helping family farms become profitable, adding good paying permanent jobs, and so on. I think the case is that farming subsidies skew the profits to large farms rather than smaller local ones. Also, as more ethanol is processed, better technology will develop to harvest ethanol from non-food based sources. Regardless, I can gather from this article that the fast food franchises are perfectly happy with the cost of fuel to transport their products.