Ethanol adds 0.5-0.8 points to U.S. food prices

WASHINGTON (Reuters) – The boom in corn-based ethanol as motor fuel added from 0.5-0.8 percentage points to U.S. food prices when they were climbing at double the usual rate, said the Congressional Budget Office on Wednesday.

In a report, CBO said larger use of ethanol drove up feed prices for cattle, hogs and poultry and, in turn, resulted in higher retail prices for food.

CBO said the increased use of ethanol accounted for 10 percent-15 percent of the rise in food prices in the year ending in April 2008, or 0.5-0.8 points of the 5.1 percent increase in food prices that was registered…..

Reuters UK