Saturday, March 22, 2008

Ethanol Continues to Victimize Consumers through Higher Grain Costs

The taxpayer subsidies included with producing ethanol continue to take their toll on consumers, as higher grain costs are impacting the prices of a number of goods; including cereal.

An AP report said: "The cost of grain has affected a number of companies, especially those that make cereals. Grain prices have skyrocketed largely due to demand for corn used to make the alternative fuel ethanol."

Company officials for General Mills (NYSE: GIS) said it was their highly successful marketing of over several product categories that helped them fend off the high grain cost directly connected to enthanol production. They were able to successfully raise their prices this quarter without a loss of sales generated.

I wonder how long it'll last before consumers rebel in this slowing economy?

One writer asks if it makes sense to increase consumer prices over producing ethanol, "which is a suspect alternative fuel that's being used to fight a suspect phenomenon, global warming. Legislators, together with environmentalists, have created global inflation, to fight a problem that some scientists don't think exists. Does that make sense?"

That's the question that needs to be answered. The religious-like devotion to ethanol by corn farmers, some environmentalists and politicians will make it a battle to find the real truth to the ethanol equation.

When people turn it into a "religous" fervor, it's hard to separate fact from fiction, as the emotions run high concerning the "green" god.

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