The Biden administration plans to increase the amount of ethanol allowed in motor fuel, a price that some observers say could drive up the cost of corn and related expenses in the food chain.
The change in regulations would temporarily allow gasoline with 15% ethanol, an alcohol mostly derived from corn, to be sold during summer. Ethanol content in fuel usually is capped at 10% during the summer to abate air pollution.
The measure is an attempt to alleviate high gasoline prices caused in part by Russia’s invasion of Ukraine. However, some observers fear that it could lead to a spike in already high corn prices.
The National Chicken Council is afraid that raising the cost of corn will make chicken feed more expensive, increasing the stress on its members. “At the end of the day — ethanol manufacturers win and consumers lose,” the group’s president told the Wall Street Journal.
However, others told the Journal that because the administration’s action is short-term, the effect on corn and food prices may not be too onerous.