Corn Commentary

Claims are Half-Baked

The bakery industry is calling on Congress and the Bush administration to “address the wheat crisis” by implementing a three point strategy that includes elimination of the ethanol import tariff and temporary waiving of renewable fuel standard requirements.

The bakers are saying that American farmers are now planting more corn for ethanol production at the expense of wheat acres, a claim which is absolutely false and provable by a simple check of the year-end crop production report from USDA’s National Agricultural Statistics Service.

In fact, wheat production totaled 2.07 billion bushels in 2007, up 14 percent from 2006. Acreage planted was 60 million acres, up 3 million from the previous year, and area harvested at 51 million acres was nine percent more than 2006.

Yet, also in fact, wheat prices have more than tripled and stockpiles are at their lowest point in decades. Why? The two major reasons are the consecutive droughts in Australia, a leading wheat producer and exporter, and growing global demand which has outpaced production for the last several years.

Eliminating the ethanol import tariff will do nothing to make it rain in Australia or lessen the demand for wheat products.