WASHINGTON – Ethanol is helping reduce the cost of the Thanksgiving holiday for the average American family. More than 39 million Americans will take to the road for their Thanksgiving holiday, traveling an average distance of 588 miles, according to AAA. That means the average American family traveling by automobile this holiday will save $29.13 on gasoline purchases because of ethanol.*
In May, the Center for Agricultural and Rural Development (CARD) released a study by economists at the University of Wisconsin and Iowa State University finding that in 2011, ethanol reduced wholesale gasoline prices by $1.09 per gallon nationally. Those savings have a very real impact on the average household budget. Ethanol reduced the average American household’s spending on gasoline by more than $1,200 last year, based on average gasoline consumption data. Since 2000, ethanol has helped save $39.8 billion annually in excess gasoline costs – roughly $340 per household per year.
“Thanks to ethanol, hardworking American families will get a break as they drive to spend the Thanksgiving holiday with loved ones. The average American family will save $29.13 because ethanol helps lower the price of each and every gallon of gasoline. Ethanol and the Renewable Fuel Standard (RFS) are also helping to reduce this country’s dependence on foreign oil, thus creating a stronger country and a stronger economy. Ethanol is a product made by Americans for Americans and we are proud that on this most American of holidays that we can offer a solution to sky-high gas prices,” said Bob Dinneen, President and CEO of the Renewable Fuels Association.
Dinneen continued, “Now, you will hear some squawking from livestock and poultry producers who oppose the RFS and ethanol. Don’t let their scare tactics ruin your holiday. The fact is turkey prices are lower this year than the last two years, according to the Bureau of Labor Statistics. The bottom line is ethanol production has nothing to do with the price of Thanksgiving dinner. Food costs are driven by energy costs. Only 14 percent of the food bill goes to raw agricultural ingredients like vegetable oils, dairy products, corn and other grains and commodities. Meanwhile, 86 percent of your grocery bill pays for energy, processing, packaging, marketing, labor and other costs. Don’t let Big Food fool you into believing anything different.”
To read more about Thanksgiving turkey prices and real driving forces behind food costs, click here for RFA’s white paper: “This Thanksgiving, Avoid Big Meat’s Baloney”.
• Turkey prices are lower this year than in 2011 and 2010. The U.S. city average price for turkey is $1.66/lb., down slightly from the previous two years, according to the Bureau of Labor Statistics.
• USDA projects 2012 turkey hen prices will be just 3.8 cents/lb. higher than 2011 prices, while 2013 prices could decrease by nearly 5 cents/lb.
• Turkey production is projected to hit a five-year high in 2012, followed by strong output again in 2013.
• Thanksgiving dinner for 10 people will be $0.80 lower this year in Virginia and $0.61 lower in North Carolina, according to the same Farm Bureau sources.
• The groups decry that “food prices have spiked nearly 18% since 2005,” the year the first RFS was passed by Congress. That’s an average of just 2.57% per year, which is right in line with the 20-year average for annual food inflation.
• Additionally, 2010 saw the lowest year-over-year food inflation in nearly 50 years. Meanwhile, the ethanol industry produced a record amount of fuel that year.
• If there was any truth to the myth that retail food prices have increased abnormally since 2005, it would be mostly because of surging energy prices. In fact, 86% of the average household’s food bill pays for energy, transportation, processing, packaging, marketing, and other supply chain costs. Just 14% pays for the raw agricultural ingredients in our groceries.
• Contrary to Big Food’s rhetoric, ethanol is helping reduce the cost of the Thanksgiving holiday for the average American family. Recent economic analysis from Louisiana State University, the University of Wisconsin and Iowa State University demonstrate that ethanol significantly reduces gasoline prices. According to AAA, 39.1 million Americans will travel by automobile an average distance of 588 miles this Thanksgiving holiday. That means the average American family traveling this holiday will save $29.13 on gasoline purchases because of ethanol.*
*Assumes average mileage of 22 miles per gallon and ethanol savings of $1.09/gallon (Du & Hayes, 2012)