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Turkey sticker shock
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Have you checked out the price of turkey lately?
You can thank Al Gore.
Actually you can thank Gore and the Midwest ethanol subsidy lobby consisting of Republican and Democrat lawmakers alike.
Gore was the leading cheerleader for ethanol as the elixir for all that ails America when it comes to energy.
He led the charge to put in place ethanol subsidies.
The end result: Ethanol gas that is not cost effective and has created a shortage of corn that in turn has sent food prices climbing.
The hardest hit is Third World countries that rely partially on buying grain from American farmers to feed poor people.
It is also hitting American consumers in the pocketbook. It is particularly noticeable as Thanksgiving approaches. Corn is the primary feed for turkeys. Ethanol subsidies have diverted much of the crop into fuel production essentially tripling the price of feed for turkeys. That puts the squeeze on turkey growers and ultimately you the consumer.
It’s the classic lose-lose scenario from the government meddling with the marketplace believing they know better than the private sector. Not only are you footing the bill for ethanol subsidies but you are paying more for food because those subsidies are being used to give farmers better prices than the market allows.
Farmers aren’t idiots. If Uncle Sam is willing to dole out bushels of more money at a set price for their corn crop why not go for it?
The tragedy of all of this is the fact ethanol isn’t really cost effective. There are studies that indicate energy consumed to make ethanol has produced a situation where more energy is burned per gallon by the time you factor in production with ethanol than with oil.
Here’s the math on the most cost effective year to date for corn ethanol subsidies.
Corn ethanol subsidies in 2006 hit $7 billion for 4.9 billion gallons produced. That means it cost taxpayers $1.45 per gallon of ethanol produced. What did we get for that? Based on government research we became 1.1 percent more energy efficient while greenhouse gases were reduced a whopping 1/19 of a percent. It gets better. Once the emissions from the ethanol manufacturing process is factored into the equation, ethanol is actually increasing greenhouse gases
By the way, not all of the subsidies in the program go to corn farmers. Oil companies will pocket $31 billion over the next five years to help them produce ethanol.
Given the amount of subsidies needed to make ethanol compete with gas prices, do you think the oil companies would have gotten into ethanol production on their own? And if they had, do you think whatever long-term contracts they entered into would send corn prices as high as the guaranteed subsidies have from Uncle Sam?
Gore, to his credit, admitted that the facts show that ethanol subsidies are a big mistake. And in a refreshing candor for a politician, he admitted at a European conference in December 2010 that the only reason he supported ethanol subsidies was political. He said, “One of the reasons I made that mistake is that I paid particular attention to the farmers in my home state of Tennessee and I had a certain fondness for farmers in the state of Iowa because I was about to run for president.”
Several environmental groups have also urged Congress to drop the subsidies including Friends of the Earth.
But like any government program it has now morphed into an entitlement in the eyes of those receiving it. Good luck finding enough members of Congress willing to go cold turkey by dropping the notion that they should use tax dollars to build loyalty among special issue constituents in their bid to keep getting re-elected.
This Thanksgiving enjoy your artificially plumped up turkey in terms of price thanks to ethanol subsidies.
As you’re forking over more money to eat a slice of turkey rest assured that your tax dollars are making sure oil companies, real Midwest farmers, and corporate farmers will have plenty of pork on their tables.