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got ethanol?

By enelson
Monday, July 9th, 2007 at 6:01 pm in driving, Environment, technology.

It’s such a joy when a journalist’s personal reality collides with his or her professional existence.

For a day, at least, I had that feeling after visiting my local Safeway store yesterday.

I came to discover that the gallons of milk I used to buy for three bucks and change now cost four bucks and change. Please forgive the inexactitude, but that’s usually how I shop for groceries.

Curious about the sudden change, I sought out the young man charged with stocking the dairy case. Before he even responded to the page over the store’s PA system, the bakery person next door volunteered that the answer was obvious.

“Ethanol has driven up the price of corn that the cows eat,” she told me, just as the dairy guy arrived. “Isn’t that right?” The dairy guy nodded.

So there you have it: Our addiction to internal combustion transportation, along with our government’s answer to insufficient oil reserves, has made it harder for us to nourish our children.

Or has it?

I decided to follow the advice of my favorite journalism school professor, Carl Sessions Stepp, who (and I paraphrase) told us students never to rely on the word of a single grocery store clerk.

I had to think for a moment whether two grocery store clerks would be sufficient, but decided I needed a more authoritative source.

I called Steve Lyle, director of public affairs for the California Department of food and Agriculture. He told me that the department sets the prices farmers get for milk each month, and this month it’s $1.98 a gallon.

They also set what they call the “Lowest Observed Price” for the various grades of milk in Northern and Southern California, and the whole milk price of $3.15 a gallon is $1 more than it was in September, with most of that increase happening in the last few months.

But the thing is, the farmer price, set by a team of economists (I resisted asking him how many it takes to change a light bulb), is based upon the demand for four dairy commodities sold on the Chicago Mercantile Exchange (Cheddar cheese, butter, dry whey and powdered milk).

So the price doesn’t take into account how much it costs farmers to feed the cattle or any other costs associated with producing the milk. Ethanol production and its affect on feed corn may indeed be putting the squeeze on farmers’ costs, Lyle told me, but it has nothing to do with the price of milk at Safeway.

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