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Loss of gas is up.
And corn prices are up and a massive drought that -- our country is continuing to make the cornfields shrivel up.
And now a bipartisan group of lawmakers -- is asking Washington to ease up on ethanol regulations this stuff is made from -- And the EPA forces oil companies to blend ethanol in the gasoline.
Oil analyst -- -- -- says the ethanol push isn't really helping anyone hi Andy what.
Are they gonna -- does -- make any difference if they if they get to the EPA get them to change their mind.
Well I don't think it's gonna make much difference at all on the one hand the EPA is mandated the use have renewable fuels.
They're gonna look at it and say we've got a lot of ethanol production capacity we've got plenty of inventory.
Let's stop the exports have happened all out of the US.
And they'll say 120 we're not gonna act on the other hand the oil industry.
Is so entrenched in using ethanol to meet fuel quality regulations.
Around the country.
It's in the logistics and distribution system they're gonna -- -- say I'm still gonna use the ethanol in spite of a reduction in the mandate.
If that -- to a car.
Up 40% of the corn is used in ethanol.
So -- not.
Go -- you've got to know what's gonna say it's about a third to 35%.
As being used last year.
This year I mean it's going to be around the same number.
So if they're using so much -- prices are going up and the corn crop is getting hit by this this drought condition that we have.
And inflation comes back it's gonna be led by made instead of maybe fuel may be food together I mean.
We're we're growing corn for fuel and if the corn is more expensive the fuel is going to be more expensive -- Well exactly I mean the corn is the raw material cost that goes into ethanol the -- portion of fuel.
Has risen over the last couple of months and that's contributing partly.
To the rising gasoline prices.
But when you have a third of the corn crop going in to making fuel.
It is impacting the price of corn.
That we're seeing impact say the cattle producers the -- bombers the food processors in the consumer.
Talking to us and commodities people last week and they said.
It's something like 75.
To 80% of everything -- Roche restored as either corn or soybean and it.
So if those prices are going up in fuel prices are going up it seems to be like to be inflation.
-- -- -- is sitting right around the corner but but I was reading through some -- sure -- is the EPA.
They don't care -- about food.
Well that's right I mean at the price said -- even fuel is not really on EPA's radar screen the only thing they worry about is.
And -- water quality as far as fuel regulations go.
And we've seen in the past even while we've had potential fuel shortage is the EPA is very reactive been very reluctant to.
Implemented changes in the regulations.
Stand by I get to the grocery counters what you're telemann.
Well you're gonna see the prices go up -- the amount of food you're buying in those packages shrank.
An oil prices going up is it because it affected people are thinking that QE3 is coming next month and -- dropping the dollar.
Or is it because of these corn prices.
Well no I think they're two different reasons I mean we've seen oil prices rally about thirteen dollars a barrel over the last month.
But cause of an anticipation.
Of QE3 here or Central Bank in Europe.
I easing monetary policy we also announcing the Fuller -- of the -- Iranian sanctions limiting sales.
And finally in the North Sea in September our oil production is going to be at the lowest level it's been in decades and that's impacting supply.
Energy and food the -- the -- that don't get put into this.
Into the -- core CP high tech world that the things I do this yes and -- about thank you always good to see you thank you you bet.