The media was very interested in hearing the story that agriculture and the ethanol industry had to tell about food prices during a press conference Wednesday at the National Press Club.
Former Agriculture Secretary John Block, National Corn Growers CEO Rick Tolman, National Farmers Union president Tom Buis and Renewable Fuels Association CEO Bob Dinneen gave opening statements about the facts on food price increases and entertained about 40 minutes of questions from reporters present and on the phone. They covered nearly every topic on the food and fuel waterfront and gave highly informative answers to probing and intelligent questions from the press. Hopefully this will translate into some balance in reporting about the food versus fuel issue.
Listen to the entire one hour plus press conference here:
Today at 1pm eastern time, agricultural and ethanol industry leaders are holding a press conference at the National Press Club. In attendance will be:
The Honorable John Block, former Secretary of Agriculture
Tom Buis, President, National Farmers Union (NFA)
Bob Dinneen, President of the Renewable Fuels Association (RFA)
Rick Tolman, CEO, National Corn Growers Association (NCGA)
The topic will be: “Farmers and Ethanol Industry to Present the Facts On Food Price Increases.”
We are working to try and stream the press conference live on UStream.tv using the player below. At the time of the conference, you should be able to click on the player and see the live stream. This is an experiment, so we will see how it works. Regardless, we are recording the conference and will have a full update available here afterward.
Update: The live stream worked! Here is a recording of the first 20 minutes or so:
The development of alternative feedstocks for ethanol doesn’t mean that corn ethanol will be thrown under the bus, according to Agriculture Secretary Ed Schafer.
Speaking to farm broadcasters in Washington on Tuesday, Schafer talked about the importance of ethanol today. “We’ve passed Renewable Fuels Standards in this country that are important,” he said. “We cannot meet those demands with (only) corn-driven ethanol as a feed stock,” But, he says corn ethanol is a “stepping stone” to get to alternative feed stocks. “If we pull it back, we can do all the research in the world and come up with new ideas for alternative feed stocks and you won’t be able to do anything with them. So we need to make sure that we continue to develop the ethanol industry based on a corn feed stock.”
Does that mean we throw corn ethanol under the bus after the cellulosic ethanol comes on line?
“Absolutely not,” Schafer says. “What happens then is you have alternative feed stocks, the market place chooses the feed stock, the market place sets the price, that’s what made this country great.”
The World Bank report released earlier this month has gotten quite a bit of media attention lately, especially regarding its concern about biofuels production.
During a press conference with President Bush Tuesday, a reporter said, “The World Bank says about 85 percent of the increase in corn price since 2002 is due to biofuel — increased demand for biofuels.”
Near as I can tell, the World Bank report does not say that. What it does say is, “Only a relatively small share of the increase in food production prices (around 15%) is due directly to higher energy and fertilizer costs.” It does not attribute a percentage to biofuels production.
What it does say is, “Almost all of the increase in global maize production from 2004 to 2007 (the period when grain prices rose sharply) went for biofuels production in the U.S., while existing stocks were depleted by an increase in global consumption for other uses.” What that means is that, as Agriculture Secretary Ed Schafer told farm broadcasters Tuesday, “Only about 25 percent of the corn crop goes into ethanol today and we have been able to stay ahead of that by yield increases.” In other words, our yield increases in the United States have offset the increased demand for corn to make ethanol.
It’s also critical to note that in the World Bank report graph showing expected world food price percentage increases for 2008 compared to 2004 - the biggest increases are in wheat (119%) and rice (101%) - not corn. Rice seems to be a major focus of the world food crisis, yet there appears to be no direct connection between the price of rice and biofuels production.
The World Bank does say that increased bio-fuel production has contributed to the rise in food prices. No one denies that. No doubt that increased corn prices have had an effect on increasing food prices. However, no one seems to know exactly how much. It is nearly impossible to sort out the impact of so many different factors coming to bear on food prices.
In announcing a food crisis task force on Tuesday, United Nations Secretary-General Ban Ki-moon blamed the escalating prices on a range of factors — high oil prices, growing demand, bad trade policies, bad weather, panic buying and speculation, as well as, “the new craze of biofuels derived from food products.”
“In addition to increasing food prices, we see at the same time farmers in developing countries planting less, producing less, due to the escalating cost of fertilizer and energy,” he said. “We must make every effort to support those farmers so that in the coming year we do not see even more severe food shortages.”
That is key to the whole food crisis right there. Supporting farmers in other countries so they can produce their own food. President Bush noted in his press conference today that the US is “deeply concerned about people who don’t have food abroad” and will continue to be generous in food donations. He also suggested a “creative policy - is if we would buy food from local farmers as a way to help deal with scarcity, but also as a way to put in place an infrastructure so that nations can be self-sustaining and self-supporting.”
President Bush noted that the high price of gasoline is going to spur more investment in ethanol as an alternative to gasoline. “And the truth of the matter is it’s in our national interests that our farmers grow energy, as opposed to us purchasing energy from parts of the world that are unstable or may not like us,” he added.
Regarding food price inflation, one reporter said, “The World Bank says about 85 percent of the increase in corn price since 2002 is due to biofuel — increased demand for biofuels. And your Secretary of State said that — indicated yesterday that she thought that might be part of the problem. Do you agree with that?”
Bush responded, “Actually, I have a little different take: I thought it was 85 percent of the world’s food prices are caused by weather, increased demand and energy prices — just the cost of growing product — and that 15 percent has been caused by ethanol, the arrival of ethanol.”
The president said the United States is concerned about the scarcity of food in poorer countries and will continue to be generous in food donations abroad.
Ken McCauley of White Cloud, Kansas says the figures used in the article published in Sunday’s Kansas City Star, for example, were too vague. He says they didn’t properly represent real data and were spun in such a way to make ethanol a culprit… a culprit of rising food prices, rising gas prices and lower fuel economy.
Laura McNamara was at the Roadrunner Turbo Indy 300 Sunday and did an excellent interview with Ken that you can listen to here:
Ken is pictured here with Team Ethanol Driver Ryan Hunter-Reay, Ethanol Promotion and Information Council Executive Director Toni Nuernberg and EPIC Director of Operations Robert White.
A professional speaker and agrifood consultant has started a new blog “to help build connection between farm gate and consumer plate.”
Michele Payn-Knoper is the author of the Cause Matters blog. “The faces behind the food plate have inspired me to find a better way to share material related to telling agriculture’s story,” she says.
The media seems to be getting the message that rising energy prices are causing food price inflation.
Here is a link to a great piece from CNN on oil and your food bill. It’s an international piece that talks about the situation from both a European and United States perspective.
Best part: this graph showing how food and oil prices have tracked together since the early ’60s. Proof is in the pudding.
Aerospace engineer and author Robert Zubrin has been getting some media attention lately for his book, “Energy Victory,” in which he outlines a simple plan for “winning the war on terror by breaking free of oil.” Most recently, he was featured on a segment of the Business News Network, a popular nationwide TV show in Canada.
Zubrin believes the American public is getting tired of being beholden to foreign oil interests and he advocates Congress passed a law requiring that all new cars sold in the USA be flex-fueled.
Be sure to read and comment on this article today on Seeking Alpha. It is one of the most well-balanced, well-researched reports on the cause of high food prices that I have seen yet.
Asking the question “Does Ethanol Deserve the Blame for Rising Food Prices?” the author rightly discusses the myriad of factors contributing to global food price increases, such as weather, population growth, energy costs and commodity market speculation. Then he says:
Figuring out how much of an impact ethanol and biofuel production has had on rising food prices is hard, if not impossible. If you just went by the headlines, you’d think that the solution to end world hunger is to stop making ethanol.
Best of all, here is how he concludes:
And of course, the introduction of ethanol into the fuel supply isn’t happening on a whim; it’s going to bring down U.S. dependence on foreign oil and will keep prices down. The WSJ reports on how biofuels are keeping oil and gas priced 15% lower than otherwise. And those energy costs have their own tremendous impacts on the actual food industry. So if you imagine a world with no ethanol, who’s to say food prices in developing countries might not be higher?
Great stuff. Thanks to Seeking Alpha for that perspective.
The media was very interested in hearing the story that agriculture and the ethanol industry had to tell about food prices during a press conference Wednesday at the National Press Club.
Speaking to farm broadcasters in Washington on Tuesday, Schafer talked about the importance of ethanol today. “We’ve passed Renewable Fuels Standards in this country that are important,” he said. “We cannot meet those demands with (only) corn-driven ethanol as a feed stock,” But, he says corn ethanol is a “stepping stone” to get to alternative feed stocks. “If we pull it back, we can do all the research in the world and come up with new ideas for alternative feed stocks and you won’t be able to do anything with them. So we need to make sure that we continue to develop the ethanol industry based on a corn feed stock.”
What it does say is, “Almost all of the increase in global maize production from 2004 to 2007 (the period when grain prices rose sharply) went for biofuels production in the U.S., while existing stocks were depleted by an increase in global consumption for other uses.” What that means is that, as Agriculture Secretary Ed Schafer told farm broadcasters Tuesday, “Only about 25 percent of the corn crop goes into ethanol today and we have been able to stay ahead of that by yield increases.” In other words, our yield increases in the United States have offset the increased demand for corn to make ethanol.
In announcing a food crisis task force on Tuesday, United Nations Secretary-General Ban Ki-moon blamed the escalating prices on a range of factors — high oil prices, growing demand, bad trade policies, bad weather, panic buying and speculation, as well as, “the new craze of biofuels derived from food products.”
President Bush noted that the high price of gasoline is going to spur more investment in ethanol as an alternative to gasoline. “And the truth of the matter is it’s in our national interests that our farmers grow energy, as opposed to us purchasing energy from parts of the world that are unstable or may not like us,” he added.
The recent criticism of ethanol doesn’t sit too well with the chairman of the 
A professional speaker and agrifood consultant has started a new blog “to help build connection between farm gate and consumer plate.”
The media seems to be getting the message that rising energy prices are causing food price inflation.
Aerospace engineer and author Robert Zubrin has been getting some media attention lately for his book,