Study Examines Food Price Reality

In Ethanol, Food vs Fuel by Chuck

In the early stages of developing Corn Commentary I realize we’ve been focusing quite a bit on ethanol and the whole food vs. fuel debate. We’ll definitely be branching out and diversifying our topics so please bear with us. Having said that I can’t help but point out some current items related to the subject that seems to be getting a lot of press again in the past week.

For starters, I’d like to point you to a white paper put out by Food and Water Watch. This is a group that has ties to some very anti-agriculture organizations. However, they’ve just issued a white paper titled, “Retail Realities: Corn Prices Do Not Drive Grocery Inflation” (pdf). Here’s an excerpt:

Pundits and food and meat processors have lamented this year’s rise in corn prices with little attention to the long-term declining trends in the real price of corn. The implication that rising corn prices warrant grocery price hikes ignores the historical grocery price insensitivity to corn prices. Over the past three decades, grocery prices have steadily trended upwards regardless of significant price volatility for corn.

Contrast that with a very misinformed editorial in the N. Y. Times this week title, “The High Costs of Ethanol.” The author of this piece claims, “Even now as Europe and China join the United States in ramping up production, world food prices are rising, threatening misery for the poorest countries.”

Give me a break. Without offering any facts or proof the author suggests that there’s a correlation between increased ethanol production and food price misery in poor countries. That’s emotional pap at best and inexcusable ignorance from a publication that would like you to put credence in what they say and think.

Going back to the Food and Water Watch paper, it’s interesting to see who your friends can be sometimes.