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Ethanol is touted as the next big thing — the big alternative to fossil fuels. Few are talking about the economic impact of refining corn into ethanol.

Here’s a good article that explains some of those effects.

You can thank the ethanol craze for:

• higher milk prices of late
• higher prices for goods that contain corn syrup (which is just about everything sweet)
• higher meat prices

The government subsidies will keep ethanol available for a while, but the supposed lower prices at the pump will just be an illusion. Lots of other goods will be more expensive.

Not only that, but according to the Iowa Dept of Agriculture and Land Stewardship:

Ethanol has less energy content than gasoline. However, E85 also has a much higher octane (ranging from 100 to 105) than gasoline. FFVs are not optimized to E85, so they experience a 5% to 15% drop in fuel economy. This will vary based on temperature and driving conditions.

How long will it be for normal Americans (like you and me) to get E85 optimized cars?

Further reading:

Consumer Reports - The Ethanol Myth

John Stossel - The Many Myths of Ethanol