Who would have thought the lowly kernel of corn would carry so much weight over fuel pump prices? If you think gasoline is high now, consider this factoid from the American Farm Bureau Federation: fuel could cost as much as 10 cents more a gallon if it were not blended with ethanol, a corn-based fuel.

Last year, the U.S. ethanol industry produced 32 percent more of the corn-based fuel than in 2006. As usage went up, so did corn prices, rising from $2 per bushel to more than $5.50 per bushel. Still, farmers aren’t getting rich. 

Tony Banks, a commodity and marketing specialist for the Virginia Farm Bureau Federation, notes in a recent statement that “corn producers’ production costs for expenses like fertilizer and fuel have doubled, gobbling up most of any added income from the higher crop price.”

And just to set the record straight, the American Farm Bureau says that increased ethanol production is not responsible for higher food prices, although it has had a role in higher prices for certain foods such as meat and dairy.  The major factors affecting prices of U. S. crops, says the bureau, are investors’ growing interest in commodity-focused funds, rising world demand (particularly in countries such as China and India which have a growing middle class), the declining value of the U. S. dollar and , of course, record-setting oil prices, which have already reached more than $100 per barrel.