Let’s Talk Thanksgiving, Transportation

By Bob Dinneen | October 11, 2013

Thanksgiving is rapidly approaching and with it comes friends, family and food. As families begin to prepare for the big meal, the grocery store displays large piles of turkeys in all different shapes and sizes. If I broke on the right side of the wishbone, I would wish that Americans would know the truth about the negative impact of Big Oil on food prices and the positive impact of ethanol on reducing transportation costs.  

Oil and energy costs are the leading cause of food price increases at the grocery store, not ethanol. On average, food travels 1,500 miles from the farm to the local supermarket. When breaking it down, only 16 cents of every dollar spent on food is spent on the actual agricultural ingredients. The rest of the dollar is spent on packaging, transporting, marketing and getting it to the grocery store, which requires oil and energy. 

This claim is backed up by the World Bank, which released a study in May finding that oil is, in fact, the primary culprit behind food price spikes. The report concluded that “… most of the [food] price increases [from 1997-2004 to 2005-2012] are accounted for by crude oil prices (more than 50 percent). … Crude oil prices mattered most during the recent boom period because they experienced the largest increase.” Additionally, when comparing the United Nations Food Price Index and World Crude Oil prices, there is a near perfect correlation. 

Thanksgiving often has large meals and food, but that isn’t the real basis of Thanksgiving. Thanksgiving is a time to spend with family and loved ones which, to many, includes a substantial amount of travel. Some take planes, some take trains, but many take automobiles, and with that comes a large expense, the cost of gasoline. AAA predicted that more than 39 million people would be traveling an average of 588 miles during last year’s Thanksgiving holiday. Add that up and it makes for a very expensive holiday season. 

Here is where ethanol comes into play. According to a recent analysis by energy economist Philip K. Verleger, ethanol production has saved consumers an average of $1 per gallon at the pump in 2012 and 2013. I know that many people nationwide have to decide if the cost is worth the trip, but with lower gas prices due to ethanol, the decision becomes easier and more people will be reunited with family and old friends. 

While the petroleum industry is causing rising food prices, ethanol is saving drivers money at the pump and that is truly something to be thankful for. 

Author: Bob Dinneen
President and CEO,
Renewable Fuels Association
202-289-3835