Oil Companies Impact Food Prices
Posted: April 2, 2008
While the oil industry has been quick to blame corn ethanol and grain prices for high food costs, they fail to recognize the profits of their own companies are the bigger culprit of high food costs, according to the Nebraska Corn Board.
“Farmers have been taking it on the chin while oil companies are raking in record profits,” said Don Hutchens, executive director of the Nebraska Corn Board.
Exxon alone had profits of $40.7 billion last year, while the five leading oil companies had a combined profit of $123 billion. Ironically, the entire U.S. corn crop for 2006-07 had a gross value of $32 billion, and only 20% of that crop was used to produce ethanol.
“When you compare the profit of one oil company last year to the total gross value of an entire year’s U.S. corn crop, you can quickly understand why Congress is asking oil company executives to explain why their profits are hitting record levels while the American consumer pays for those profits at the pump and supermarket,” said Hutchens. “The oil companies are also fighting to keep $18 billion in tax breaks over the next decade.”
Hutchens said they were interested in hear what the oil companies had to say about renewable energy during a Congressional hearing held on Tuesday. “Our perspective is that they have not shown much support and have in fact tried to shift the blame of subsidies and high food costs to the American farmer,” Hutchens said. “In reality, the American farmer has worked hard for the last 30 years to show the benefits of a renewable energy source like ethanol.”