Oh boy... now ethanol is blamed for the high price of coffee!
So, farmers are able to sell corn for higher prices because ethanol fuel is becoming more popular here in the United States, right? Whether of not that means that food products such as tortilla's, beer, tequila and milk are directly related to ethanol is often debated. Obviously, if you are a consumer who is paying more for a product such as milk or tortilla's, and the maker of said product blames the price increase on ethanol, you may get a bad taste in your mouth about the alternative fuel. Those of us out there who must work nights might be cursing ethanol over something which seems oddly unrelated: coffee. Not just any coffee mind you, but the super-potent stuff that your local neighborhood Starbucks is serving up. A commenter from the cited source article mentions an excellent point: if your coffee drink contains no dairy, why would the price go up for that? I imagine that if the price sweep is across the board and includes even black coffee or soy-based alternatives, those consumers are helping to pay for the rest of the drinkers' dairy addiction. But a later comment says that the price increase will not affect regular black coffee. I dunno... I'll check the menu at the Starbucks down the street and see for myself.
The writer of the Environmental Economics blog, Tim Haab, has coined the phrase "Ethanol Dominoes" when referring to products which cost more seemingly due to high corn prices seemingly due to ethanol. True or not, it's pretty catchy, huh?
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[Source: Environmental Economics via Treehugger]
Reader Comments (Page 1 of 1)
frank78 5:58PM (7/25/2007)
Seems odd at first. However, if farmers who were formerly growing corn for food, formerly growing other crops like coffee, milking dairy - if these farmers switch over to corn for ethanol (innefficient) then the supply of those other crops goes down. Supply drops = price increases.
You do have to wonder though what reality is. US farmers are subsidized billions of dollars per year (especially sugar farming, which follows a soviet communist style w/ govt regulated prices and production quotas) and farmers are paid to NOT grow the food they can, so the supply doesn't go too high, which then keeps all food prices high.
Once again, meddling from the federal govt screws over the consumer.
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Peter Rockwell 2:29PM (7/26/2007)
The plural of tortilla is tortillas, not tortilla's. Tortilla's means something belongs to the tortilla.
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