US food prices are not linked to expanded domestic ethanol production from corn, according to a recent study commissioned by the Renewables Fuels Association.
"Based on this analysis, retail food prices were not impacted in any demonstrable way by expansion of US grain ethanol production under the Renewable Fuel Standard (RFS) over the past decade," said Informa Economics IEG in its study.
The analysis, released Wednesday, also showed that the food consumer price index slowed its inflation over the past decade while ethanol production grew.
Corn is the primary feedstock for US-produced ethanol, so the discussion around ethanol production increasing food costs focuses on corn prices.
The study found a 0.097 statistical correlation between the food consumer price index and corn prices.
"[This] implies that less than 10% of the variation in the food CPI is explained by the variation in corn prices," Informa Economics IEG said in its study.
One of the reasons the link between corn prices and consumer food prices is so weak is that much of what a consumer pays for has to do with transportation, distribution and other factors associated with retail, according to the analysis.
"The farm share of the overall food dollar is only 10%," Informa Economics IEG said.
The analysis compared percent changes in the food consumer price index against percent changes in corn prices on a quarterly basis.
