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Farm groups say energy prices, not ethanol, driving food costs higher

Dec 27, 2007 10:36 AM

Consumers may have paid a little more for their holiday meals this Christmas, but it’s unlikely farmers should have to shoulder the blame for the higher prices, farm organizations say.

The American Farm Bureau Federation says the traditional holiday meal might cost $4 more this year, but a look at the facts shows it’s more likely energy prices – including the price at the pump – not ethanol prices that are fueling the rise at the grocery store.

Heated discussions on food prices and supplies have stridden in lockstep with debate of the energy bill Congress recently passed and President Bush signed just before Christmas. The bill sets a quota for 36 billion gallons of biofuels and 15 billion gallons from corn-based ethanol by 2022.

But those newspaper reports and TV broadcasts linking food and gasoline prices to ethanol use are flawed, according to the leaders at the AFBF and the National Corn Growers Association.

-- It’s true that holiday dinner for 10 was about $4 higher this year, but the real dollar price adjusted for inflation has actually dropped by about 9 percent in the past 20 years, according to Farm Bureau economists.

-- Americans spend about 10 percent of their disposable income on food. Households in India often spend 50 percent; many European countries spend double what Americans do.

-- Farmers work hard to ensure the food supply is not only safe and secure, but plentiful enough to meet all demands and retain affordable food prices consumers have come to expect. Corn producers are harvesting the largest crop on record – more than 13 billion bushels. Of that, nearly 2 billion will remain for use next year.

-- Farmers contribute to national energy security and no shortage of corn will result because of increased ethanol production.

-- Ethanol production is projected to use 17 percent to 18 percent of corn yields with roughly 30 percent being returned to the feed system as distiller grains, which have higher unit protein content than the original corn.

-- New technologies are resulting in continuing increases in per acre corn yield, making unlikely any shortages for food or fuel, even for global supplies.

-- Corn growers are part of the solution to high energy prices. They are helping to create a more secure energy future for Americans by producing corn for cleaner-burning renewable ethanol, and not at the expense of providing food.

“Collectively, America’s farmers have harvested the largest corn crop in history this year,” says Ken McCauley, farmer and chairman of the National Corn Growers Association. “With increasingly demanding food, feed and fuel needs to meet, they have worked hard to ensure our food supply is not only safe and secure, but plentiful enough to meet all demands and retain the affordable food prices consumers have come to expect.”

To learn more about the impact farmers have on keeping the country's food costs affordable while stretching energy resources, visit www.farmersmatter.org.

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