The ethanol subsidy most definitely contributes to the rising cost of food and other commodities be influencing the demand curve for corn and moving the price higher in the PvsD curve. Pretty basic.
1. Displacement of other crops.
Before the (relatively) recent switchover from MTBE to ethanol as an oxygenator mandated by fed.gov, I recall driving through south/gulf coast Texas with cotton fields as far as the eye could see. No more. Now it is "Corn, corn, corn...nothing but corn!" (to quote Secondhand Lions). Corn also requires more water & fertilizer. Corn has displaced cotton driving down the acreage devoted to cotton and driving up cotton's price. I'll bet dollars to donuts this occurs with food crops, too.
Heck, they've even planted corn around DFW. In-freaking-sanity in a market without subsidy & mandates.
Cotton is just one example of corn displacing other crops that are more suited to the land. Growing corn on corn-unfriendly land requires greater inputs, but with subsidies and mandates, it makes sense for some landowners.
2. Increased fuel costs due to the ethanol requirement.
Ethanol is 10% of the fuel content at the gas pump, but provides less than 10% of the energy of the total volume. It costs more to make ethanol and it costs much more to ship it to a gas station.
3. Ethanol subsidies & mandates drive up the price of corn and makes livestock products (meat, milk, etc.) rise in price.
This is very easy to see in the grocery store, but not the usual inflation stats, because inflation stats do not include fuel & food for some insane reason. A new computer I can live without. Food & transport, not so much.
