Agriculture Secretary Ed Schafer will present a three pronged strategy to deal with rising food prices, climate change and energy security when he travels to Rome next week for the conference on World Food Security being held by the Food and Agriculture Organization (FAO) of the United Nations.
Schafer says the strategy is basically to “provide food and other support to people who are hungry now, direct development assistance to those countries best able to rapidly increase the production of key food staples that can help feed the hungry, and encourage action to address multilateral and country-specific policies that prevent access to food and the technologies that produce food.”
To try and encourage greater use of biotechnology, Schafer and Director of U.S. Foreign Assistance Henrietta Fore will host a side event focused on new technologies to showcase developing countries that have moved forward with public investment in adoption of bioengineered products. “Bioengineered crops are one of many situations that need to take place for increasing yields around the country if we’re going to meet the demands of increased consumption,” Schafer says.
Biofuels will most definitely be on the plate at the World Food conference and Schafer is prepared to defend US ethanol production policy. “I would point out that in the United States and in other countries as well, all ethanol production specifically has come from increased yields in the corn crops,” Schafer said. “Our export markets are up in corn out of the United States. The yield increases are taking care of it, and certainly the benefits derived are much more than the 2 to 3 percent that is contributing to the rising inflation in food costs internationally. We think it’s an important initiative, and while people do have some concern I think we can point out the facts here, not the emotions but the facts, that this is not distorting the global price of food. And it’s an important direction we need to go.”
Despite the media feeding frenzy over ethanol, the demand for flex-fuel vehicles is up, at least in Mankato, Minn. The reason is higher gas prices, since E85 sells for about 70 cents a gallon less than regular unleaded.
A recent story on KEYC-TV interviewed Clements Auto Company in Mankato says more people have started buying E85s over the past few years. “Sales have gone up. People come in looking and asking does it burn E85?,” said Kurt Krumwiede with the dealership.
Two new blogs have debuted that make for an interesting contrast in the fuel-food debate that takes up so much of our time. Goodfuels.org is a new blog by the Renewable Fuels Association. Some of its writers also write here, on occasion. Their names and contact information are clearly displayed on the website.
Meanwhile, across the tracks, someone created a blog at “foodb4fuel.com,” a lousy address because it is hard to give out in radio interviews. You’d always have to spell out the “b-4.” And its authors are … get this: named “kernel” and four variations of “foodb4fuel.”
No conspiracy here, folks. No stealth campaign.
Uh huh. We challenge them to reveal themselves.
Update 6/4:
They have removed the contributors list shown on this post.
Foodb4fuel.com now has an “About Us” page … that fails to list the organizations involved.
The recent attack on corn ethanol is based on the faulty assumption that, of all the factors affecting food prices, the only factor that can be changed by government is the impact on corn demand and prices by ethanol producers. the government can’t do anything about higher demand from world population growth, or about oil prices.
Well, that’s just plain wrong. We’ve long been of the opinion, shared by many, that higher energy prices have much more of an impact on retail food prices than grains such as corn. And a Wall Street Journal oped today argues that there is much Congress can do in this regard, such as allow more domestic drilling. In fact, its headline is “Blame Congress for High Oil Prices.”
But the real news today actually comes from the Commodity Futures Trading Commission, which has announced “multiple energy market initiatives.” Among these initiatives is a crude oil investigation. The CFTC states:
In December of 2007, the agency’s Division of Enforcement launched a nationwide crude oil investigation into practices surrounding the purchase, transportation, storage, and trading of crude oil and related derivative contracts. Although the Commission ordinarily conducts enforcement investigations on a confidential basis, the Commission is taking the extraordinary step of disclosing this investigation because of today’s unprecedented market conditions. The specifics of the ongoing investigation remain confidential. All Commission enforcement inquiries are focused on ensuring that the markets are properly policed for manipulation and abusive practices.
Herbert Meyer, who served during the Reagan Administration as Special Assistant to the Director of Central Intelligence and Vice Chairman of the CIA’s National Intelligence Council, is a contributor to the American Thinker, “a daily internet publication devoted to the thoughtful exploration of issues of importance to Americans.”
Recently, he did a very thoughtful post entitled “The Bum Rap on Biofuels.” He noted that he had been staying out of the debate on that website, which was mostly negative towards biofuels, because he is “on the board of directors of Earth Biofuels, a Dallas-based producer of fuels including ethanol and biodiesel.”
Breaking his silence with full disclosure, he said he hoped that because he has a financial interest in biofuels that some readers would consider the possibility that he actually knows what he’s talking about.
One of the best points Meyer makes is that the US is producing more corn than ever before - enough to produce both food and fuel.
According to the US Department of Agriculture, in 1995 American farmers produced 192 million metric tons of corn. Of this, 14.7 million tons were used to make ethanol, from which 4.9 million tons of dried distillers grain were returned to the grain market. That left 182 million tons available for consumption and export.
In 2007, US corn production rose to 349 million metric tons. Of this, about 62 million tons were used to produce ethanol, of which 21 million tons of dried distillers grains were returned to the grain market. This left a whopping 308 million tons available for consumption and export — an increase of 110 million tons, or about 82 percent, over the 1995 figures.
He calls the main reason for global food shortages “the biggest, most under-reported story of our lives.”
Today, more human beings are emerging from poverty than at any time in history. If the present trend continues, within our lifetimes — or certainly within our children’s lifetimes — the majority of human beings will have emerged from poverty and joined the middle class.
That has led to more people improving their diets by buying more food and eating more meat - and this is a good thing!
And he of course points out the irrefutable connection between higher oil prices and higher prices for everything else, including and especially food.
Mark Lambert with the Illinois Corn Growers must be auditioning to be a writer for David Letterman - he came up with the following “Top Ten Reasons I Don’t Use Ethanol.”
10. Saudi Arabian riyals are much prettier than American dollars
9. Baby seals look good in a fresh coat of crude oil
8. Terrorists over seas will hate us even more when we stop sending them our money
7. The best sunsets are viewed from behind a curtain of smog
6. The oil execs won’t be able to afford their private islands on anything less than 8 digit salaries
5. I’m cold, bring on the global warming
4. I want my children to develop long lasting neurological problems from carbon monoxide emissions.
3. Alaskan beauty is overrated, bring on the drilling
2. Who needs ozone anyway, I need to get tan for summer vacation
Domesticated turkeys are widely believed to be among the dumbest animals on earth, supposedly doing such things as standing in the rain with their mouths open till they drown or congregating on top of each other in one corner of a pen, suffocating the unfortunate ones at the bottom.
The intelligence of turkeys may be arguable, but it seems the poultry industry thinks we are even dumber than turkeys. During a conference call this week with other organizations calling for an end to federal incentives for ethanol production, Joel Brandenberg with the National Turkey Federation used this example for the impact higher corn prices is having on food prices. “You can find a high-end turkey breast cut that a year ago cost $5.50 a package now costing $7,” he stated.
That’s an increase of $1.50. According to production statistics, the cost of corn needed to create a pound of turkey has increased from 3.5 cents a pound to about 11 cents a pound in the past year.
Now, we don’t know the exact weight of that package of “high-end turkey breast” to which Brandenberg referred, but that makes it all the more insidious. It could be a five pound turkey breast or just a pound. He doesn’t give a price per pound, but let’s just for sake of argument say that it was a five pound package at $1.40 a pound - sounds reasonable given that the latest average retail price for whole frozen turkey was $1.17 per pound, according to the Bureau of Labor Statistics.
If it was five pounds, the price increase for corn to feed that turkey, based on a current price of $6 per bushel (which they are not even paying yet), would be less than 35 cents - not $1.50.
Chances are there must be other factors responsible for the increase in turkey prices, most likely energy, which would make up a much greater share of the increase. Now, granted, the price of a “high-end turkey cut” in Washington DC may be a lot higher than $1.40 a pound - which makes it not a very good example to use anyway for the “real impact on working families that are trying to make a food budget” as Brandenberg called it.
Point being - the food companies are highly exaggerating the impact of corn on food prices. And hopefully the American public will prove that they are smarter than turkeys and figure that out.
With apologies to the Temptations, I thought of the Farm Bill saga this week when I happened to hear that old tune “Ball of Confusion” on the radio yesterday. So, I came up with my own lyrics - somebody call Rush Limbaugh… Read the original lyrics here.
Titles left out,
Titles left in,
All because of a spacey clerk’s sin
Vote, vote, vote, but it’s still not done.
Aye after aye, it passed with ease,
Vote for the farm bill and we’ll be free
Rap on, Congress, rap on
The only person talking about heed thy budget is the president
And it seems
Everybody’s interested in passing it
But the White House resident
Bill of confusion, oh yeah
That’s what the farm bill is today, hey hey
The price of food is at an all time high
Now they are saying that ethanol is why
Planting is going into summertime, and
The bill’s not done
Resolutions, quick solutions to control the voting roll
Shoot the bill back again
So Bush can use his veto pen
Politicians say more taxes will solve everything
And the bill’s still not done
So, round and around and around we go
Where the bill’s headed, nobody knows
Oh, great googamooga, can’t you hear me talking to you
Just a bill of confusion, oh yeah
That’s what the farm bill is today, hey hey!!!
On Thursday, representatives from a number of groups opposed to ethanol held a telephone press conference to call for Congress to revisit “food for fuel” mandates. Among those participating were representatives from the National Restaurant Association, National Retail Federation, National Council of Chain Restaurants, National Chicken Council and National Turkey Federation, as well as people like Tom Elam of FarmEcon, Lester Brown with Earth Policy Institute and Ken Cook of the Environmental Working Group. The conference was organized by the Glover Park Group, the PR firm hired by the Grocery Manufacturers Association for the express purpose of smearing ethanol.
I call it a press conference because that’s what they called it, but judging from the lack of questioners and almost no media stories, I can tell you that there were very few actual reporters on the line. That meant I got to ask a lot of questions.
Besides providing commentary for this blog, I write for a number of other on-line publications, such as Domestic Fuel and I am also a farm broadcaster for Southeast Agnet radio that covers Florida, Georgia and Alabama. Because that is a big poultry producing part of the country, I was interested in the comments from the poultry folks on the call.
One of the things that struck me from the poultry side was a comment by Richard Lobb of the Chicken Council. He said, “The total cost of producing chicken has gone up about 45 percent and these are just unsustainable increases and its going to get worse because a lot of corn is bought on futures contracts so chickens have been eating their way through $2.50, 3 and 4 dollar corn and soon that will be replaced by $6 corn.”
That struck me because when oil on the futures market shot up $4 a barrel in one day this week, the very next day prices at the pump were increased. If corn had the same direct and immediate impact on the price of chickens, they would already be paying $6 a bushel.
So, I asked them if they would be happy if the ethanol industry would just go away. Lobb responded that they just wanted to reduce or eliminate the RFS, blenders credit and tariff. “If you did all those things, you would still have an ethanol industry, we’re not talking about doing away with the ethanol industry but it would not be the size that it is today and would not be taking away so much corn from food and feed.”
Joel Brandenberger with the National Turkey Federation chimed in, “I don’t know of anyone in the livestock and poultry industry that’s anti-corn based ethanol, but we’re anti-ethanol policies that are manipulating the price of grain.” Hmmm….
There was so much more, but what really got me was the assertion by economist Tom Elam that EVERY single food commodity and product is being affected by higher corn prices, more significantly than energy costs.
“When we remove corn from the market with mandates, we’re going to affect everything else in the system that has to compete for acreage,” Elam said. “So, when corn prices go up we see inflationary effects throughout the farm production system and those are far greater than energy.”
Okay, I said - so you are saying that corn prices have an effect on fruits and vegetables? “Oh yeah,” he replied. “When corn prices go up, hay prices go up. In California, there’s a lot of hay produced for the dairy herd. Hay prices have gone up significantly over the last year, so that makes farmers more likely to produce hay and less likely to produce tomatoes.”
And this guy calls himself a farm economist? Give me a serious break. That statement is so blatantly false it almost made me laugh out loud - or call him a liar to his face. Show me one single farmer who produces tomatoes that sell for at least 50 cents a piece who would switch to growing hay! All I could say was that I was certain that would never happen in Florida.
Listen to that exchange here - it would be amusing if the guy wasn’t so evidently trying to mislead the public:
Just in time for more summer blockbusters, several stories are appearing about how cinemas are charging more for popcorn. Advertising Age had the best factoid on this in its story:
“… the price of the paper pulp to produce popcorn tubs has jumped 40% in the past 36 months, making the tub more expensive than the corn inside it.”
To try and encourage greater use of biotechnology, Schafer and Director of U.S. Foreign Assistance Henrietta Fore will host a side event focused on new technologies to showcase developing countries that have moved forward with public investment in adoption of bioengineered products. “Bioengineered crops are one of many situations that need to take place for increasing yields around the country if we’re going to meet the demands of increased consumption,” Schafer says.
Despite the media feeding frenzy over ethanol, the demand for flex-fuel vehicles is up, at least in Mankato, Minn. The reason is higher gas prices, since E85 sells for about 70 cents a gallon less than regular unleaded.
Two new blogs have debuted that make for an interesting contrast in the fuel-food debate that takes up so much of our time. 
The recent attack on corn ethanol is based on the faulty assumption that, of all the factors affecting food prices, the only factor that can be changed by government is the impact on corn demand and prices by ethanol producers. the government can’t do anything about higher demand from world population growth, or about oil prices.
Recently, he did a very thoughtful post entitled 
Mark Lambert with the 
The intelligence of turkeys may be arguable, but it seems the poultry industry thinks we are even dumber than turkeys. During a conference call this week with other organizations calling for an end to federal incentives for ethanol production, Joel Brandenberg with the National Turkey Federation used this example for the impact higher corn prices is having on food prices. “You can find a high-end turkey breast cut that a year ago cost $5.50 a package now costing $7,” he stated.
With apologies to the Temptations, I thought of the Farm Bill saga this week when I happened to hear that old tune “Ball of Confusion” on the radio yesterday. So, I came up with my own lyrics - somebody call Rush Limbaugh…