Corn Commentary

Anti-Ethanol Call

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: