According to the American Farm Bureau Federation (AFBF), the retail cost of menu items for a classic Thanksgiving dinner including turkey, stuffing, cranberries, pumpkin pie and all the basic trimmings increased about 13 percent this year. That may seem like a lot, but it still means that the average cost to feed a hungry table of ten is less than $50 – not even five bucks a plate. Try to get that in any other country for the same price!

“The quality and variety of food produced for our dinner tables on America’s diverse farms and ranches sets us apart from our contemporaries around the world,” said AFBF President Bob Stallman. “It is an honor for our farm and ranch families to produce the food from our nation’s land for family Thanksgiving celebrations.”

The turkey itself is what gobbled up most of the price increase this year. According to AFBF, a 16-pound turkey will cost about $21.57 this year at $1.35 per pound, an increase of about 25 cents per pound over last year. That triggered some misinformed columnists to start crying fowl and place the blame for the higher price on ethanol.

“Our biofuels policies are a big cause of the rising cost of food in recent years, and it just feels wrong to use food for fuel with so many families struggling to feed their families,” wrote Marie Brill of ActionAid in the Huffington Post, adding that “federal ethanol subsidies … are driving up the price of everything from eggs to milk to — yes, turkeys — and undoubtedly, some families will just have to go without.”

However, AFBF economist John Anderson says it’s more a case of basic economics – supply and demand. “Turkey prices are higher this year primarily due to strong consumer demand both here in the U.S. and globally,” said Anderson.

A more well-rounded and less emotional look at the cost of turkey comes from New York Times’ Wealth Matters columnist Paul Sullivan. “It turns out that turkey pricing is not much tied to commodities prices. Instead, other factors, like tight margins for farmers and perceptions of value, play a much bigger role,” he explains. “For most of us, the price we pay for our turkey bears little relation to what it costs to raise it.”

By the way, if you are into the organic scene, you can expect to pay double the amount for the average Thanksgiving meal, according to the Arizona Farm Bureau. The Organic Thanksgiving dinner with all the trimmings will cost $106.39, with a 16-pound organic turkey at $63.84 or $3.99 per pound. But really, even that is a bargain at just over $10 per person.

So, gobble up and give thanks this week for the most abundant and affordable food supply in the world.

Scratch beneath the surface, though, and the local food movement isn’t always what it seems.  A complete cultural shift to a paradigm in which local foods reign supreme would yield some ugly results for the economy and for our health.

Simply, local food proponents do not account for basic economic realities in their public policy platform.  From the economic advantages of specialization and trade to the realities of scale of economy, the shift toward a government-favored status for local foods, already well underway, would both make food more expensive and increase pollution.

On top of that, the foods which would become the most expensive in a local food world would be those needed for a healthy, balanced diet.  Obesity already plagues the United States.  If locavores get their way, the poor would be condemned to a sentence of junk food options for the crime of being unable to afford their nutrient-rich, lower-calorie counterparts.

So speak up.   Trends and fads come and go.  Fashions and crazes like leisure suits and pet rocks pass naturally through the cycle of cool.  Don’t let this trend, and all of its harmful repercussions, be written into our laws and regulations.  Tell the government to keep our options open instead of basing public policy in popularity.

Guess what? A lot of people are upset about a lot of things.  But, as the many causes associated with the demonstrations multiply, some food elitists have started joining the “99%” while pushing an agenda that is not supported by the masses.  Delivering misconstrued messaging that purportedly promotes democracy and touting dubitable sources, these fear mongers hype a plight that does not exist.

A recent blog post on Civil Eats outlines what the food-motivated occupiers actually want.  The outcome of their desires would effectively squelch the freedom of average Americans to select the diet they prefer in favor of dictating a “healthier” America.  By painting a seriously skewed picture of American agriculture, the elitist radicals deny the basic tenets of capitalism, an idea most Americans closely link with freedom.  They condescend, offering only scant information provided by sources which either speak out of their field of expertise or have been debunked time and time again.  Relying on a conception that Americans will embrace this emotionally charged propaganda without meaningful consideration, they aim to dictate both the choices of consumers and the ability of farmers to produce an abundant supply of healthy food choices.

Since an early age, children learn that they can “vote with their pocketbooks” as, in a free society the laws of supply and demand provide a tool with which they affect corporate America directly through their purchasing decisions.  Yet, these protesters instead pose the idea that “75 percent of the population are obese or overweight and many are chronically ill with diet-related diseases” because of a corporate-controlled food supply.  In doing so, they offer the easy out to anyone who makes poor choices by denying the long-valued ideal of personal responsibility.

Americans are not spoon-fed or force-fed the oversized portions of high-calorie foods that lead to weight gain.  Instead, they choose a diet that they enjoy. Average Americans may not make the same choices as these activists, or even base them upon the same values, but that does not discount their opinions.

That argument sounds strangely familiar…

Many people take the easy academic out and blame corporations for producing the choices that they secretly favor.  So, the protesters validate them.  By blaming obesity on the corporations, these master debaters place the blame on faceless, callous mental images of corporations.  These arguments further disguise an elitist agenda under the blanket of anger against corporations spun with the threads of discontent with financial entities whose corporate irresponsibility pushed our nation toward recession.

While these protestors claim to stand up to corporate farming, they rage against a corporate machine that doesn’t exist in the way they portray it. g.  In all reality, 95 percent of all farms in America are still family owned.  These growers, most often the descendants of a proud tradition of the rugged individualists who first made farming flourish here, make informed decisions every year on what to put in their fields.  Farmers understand what types of climates and soil produce certain crops. They know first-hand that selecting seeds that can resist stressors common in their area will increase the chance of a successful harvest.  They study their land, growing the most abundant crop possible in a way that preserves the environment- the single greatest resource as growers.

Pushing this reality aside, the blog post in particular jumps to the idea many espouse: somehow, big companies are behind what farmers produce.  While a variety of companies do sell seeds, as consumers farmers select what they see as the product that will grow the best crop given their particular circumstances. If they did not see value in biotech, they wouldn’t pay for it.

Pointing to the rapid growth of sales for corn seeds with the Roundup Ready trait, the blog implies that, in order to achieve this type of success, the seed provider must be exercising some sort of secret power.  In a way, successful seed providers are exercising a power that may be mysterious to the protestors.  They make effective, proven, safe products that farmers like.  Most average citizens understand that, when you make something that people like instead of just empty rhetoric, it tends to become popular quickly.  Mystery solved.

The activists cite self-proclaimed “experts.” Again relying on the inaccurate assumption that the average Americans they claim to represent will be too lazy to examine these experts credibility, their arguments rely heavily on the claims made in the Oscar-nominated documentary Food, Inc.  (To read up on the problems of the documentary, read American Agri-Women’s Food Inc Analysis.)

The aforementioned blog post in particular also cites a doctorate.  Instead of the logical selection of citing a medical doctor for information on human health, or even a biologist, nutritionist or dietician, the information sourced are the opinions of a physicist.  While a doctorate requires mental aptitude and dedication, it seems like a large leap to place trust in someone speaking so far outside of their area of expertise.  If a physicist is in no way licensed to practice medicine or dispense dietary advice, it might appear more credible if the expert cited in these areas were thus raising the question of how the author made such a selection.  The word “desperation” comes to mind…

Opponents rely on inaccurate data and select seemingly odd sources only when no better choices exist.  This proves true yet again with the implication that Americans chose processed foods because they are cheaper.  Looking at the research shows, cooking homemade meals from the ingredients that they deem healthy, albeit produced using more modern practices, actually saves money.  Again, food choice has not been obliterated by a corporate plot.  The average American simply does not chose the foods that the protestors’ agenda would dictate.

Instead of occupying a park only to spout propaganda, those seeking to occupy our nation’s fields and stomachs should face reality.  The food system, while as much of a work-in-progress as any other human endeavor, is functional. Every year, farmers provide an abundant supply of quality food.  They do so at prices lower than anywhere else in the developed world.  They do so despite challenges both from the weather and from the very people eating the food they grow.

Do not let the occupiers win.  The monopoly they seek to create would take away choice, push up prices and kill the efficiency that allows farmers to feed the actually impoverished, hungry masses they pretend to represent.

While the logic seems to be there, the facts do not back up this argument.  Actually, only a small portion of the money a shopper pays in the grocery checkout line ends up in a farmer’s pocket.  The average box of corn flakes contains only a dime’s worth of corn.  A two-liter bottle of soda contains only 12 cents’ worth.  Upset over rising poultry and beef prices?  Only 33 cents per pound of the price of each can be attributed to corn.  In reality, even at $7 per bushel, corn accounts for only a small fraction of the total price consumers pay for food.

So why are prices on the rise? Like many economic situations, a variety of factors account for differing portions of rising food costs.  Transportation costs have risen significantly as oil and gasoline prices rocketed skyward.  Increased competition pushes manufacturers to undertake expensive marketing campaigns.  Some high-end grocery retailers even report record profits.  Together, these factors account for a majority of cost increases.  Notably, the actual farmers growing the food do not profit from any of these factors.

Instead of blaming farmers, realize that they work incredible hours, often in inclement weather or late into the night, to produce the food for families in the U.S. and around the world.  Ninety percent of U.S. corn farms are run by families.  They face the same challenges and share the same values as the families relying on them.  U.S. farmers deserve to be respected for their amazing contribution not scapegoated by the media to hide where consumers’ food dollars actually go.

Probably because they know that “curtailing” policies created to promote domestic, sustainable, renewable energy will fatten the wallets of their benefactors, not the animals they feed.  If these poultry pushers and meat marketers have their way, the production of corn-based ethanol will cease altogether.

Not only would this flood the market with unsustainably cheap corn, it would impact what consumers pay at the pump.  In modern America, almost every citizen relies on motorized transit, be it public or private.  As studies have shown , without ethanol consumers will pay more for every gallon of fuel thus negating grocery aisle savings.

Higher fuel prices impact more than the cost of filling up the family car.  Nearly all goods purchased in the United States are transported to the final point of sale from another destination. Higher fuel prices mean that each of these products will reflect the increase.  By channeling all corn from ethanol production, they would have us trade a more reasonable fuel cost felt throughout the economy for momentary meat savings.  But then again, poultry and meat are trucked to grocery stores too.

USDA’s Economic Research Service recently released a new report that attempts to answer the question “Why Have Food Commodity Prices Risen Again?” The report provides a comparison between the 2008 price spike and the one we have been experiencing here lately, noting that while “many of the factors that contributed to price increases in 2002-08 and 2010-11 are the same, the timing, sequence, and relative importance of these factors varied.”

It is clear that food prices have risen since last summer, along with prices for everything else. According to the report, by January 2011, all of the major food price indices had set a new record high, surpassing their June 2008 records.

A couple of quick take-aways from the report, which is easy to read and includes several illustrative graphics:
- Prices for EVERYTHING are higher, not just food.
- Higher livestock products, particularly beef, are playing a bigger role this time.
- Recovery from global recession is increasing demand and prices for meat.
- Weather and declining S/U ratio are main immediate causes of current increase.

Regarding biofuels, the report notes that the huge increase in global production of both ethanol and biodiesel did play a role in higher crop prices between 2002-2008, “attributing most of the rise in food commodity prices to biofuel production, however, seems unrealistic. Crop prices dropped more than 30 percent during the last half of 2008 even though biofuel production continued to increase. Further, nonagricultural prices rose more than agricultural prices, and the price of corn (an ethanol feedstock) rose less than for rice and wheat (not biofuel feedstocks). Clearly, there were other factors at play.”

Weather appears to be the biggest contributing factor to higher prices this time around, according to the report. A series of adverse weather events were compressed into 10 months, beginning in June 2010. Weather around the world was either too dry, too wet, too hot, or too cold, sharply reducing expectations for 2010 global crop production and stock levels and resulting in higher prices. Similar production-reducing weather events occurred prior to the 2008 price peak, but they were spread over a 3-year period (2005-07).

The long-term contributing factors to higher food prices cited in the report include: global growth in population and per capita incomes, related increases in world per capita consumption of animal products, depreciation of the U.S. dollar, and rising energy prices. Maybe commodity market speculation as well, although the report concludes that while there is a “correlation” between market activity and higher prices, that does not necessarily indicate any “causal effects.”

The bottom line conclusion is that lots of factors contributed to food price spikes in 2008 and 2011, as well as five other similar spikes since 1970, and like the others before it, this too shall pass. Farmers and ranchers will make production decisions based on market signals and a new equilibrium will be reached. “With average weather over the next year or so, world agricultural production would be expected to increase and prices would retreat.”

In other words, what goes up must eventually come down. But when food prices come down again, will anyone ask why?

Addressing fallacies about food prices, water use and greenhouse gas emissions, Forrest Jehlik shows clearly how the many misconceptions that plague ethanol have no scientific basis.  Backed by Argonne’s laudable reputation for scientific excellence, his statements provide the direct, clear facts.

Noting that the 900,000 barrels of ethanol the U.S. produces per day is equal to our Nigerian oil imports and “within striking distance of the amount we import from Venezuela or Saudi Arabia,” Jehlik gives strong reasons to reexamine our view of ethanol itself and of the policies and regulations aimed at this amazing industry.

The anti-biofuels agenda for the G-20 was set earlier this month with a report from the World Trade Organization, World Bank and several other international organizations that largely blames biofuels production for volatile world food prices. “If oil prices are high and a crop’s value in the energy market exceeds that in the food market, crops will be diverted to the production of biofuels which will increase the price of food,” the report states, making one of its ten recommendations to the G20 ministers being that “G20 governments remove provisions of current national policies that subsidize (or mandate) biofuels production or consumption.”

The Renewable Fuels Association calls the international report incomplete and unbalanced. “Most glaringly, this report fails to recommend concrete steps that could be taken by G20 countries to combat the impact of higher energy costs on food price volatility,” said RFA Vice President for Research and Analysis Geoff Cooper. “Remarkably, the report fails to properly address the impact of prices for oil and other energy sources on food price volatility.”

Agriculture Secretary Tom Vilsack says he intends to defend biofuels at the summit, stressing their importance to the economy and the environment. “America is working on developing new feedstocks that don’t pit food versus fuel but that create new rural economic opportunities and allow us to continue to expand on our efforts to build a much more renewable energy source,” said Vilsack, who is attending the Paris Air Show prior to the G20 meeting to discuss biofuels for aircraft that can be made from dedicated energy crops.

In addition to eliminating biofuels production, groups like Oxfam are calling on the G20 to support the creation of national and regional food reserves in developing countries, which they claim would help avoid food price surges. Vilsack says the U.S. is concerned about how those reserves would be managed in order to prevent manipulation and he is hoping that the countries choose to focus more on increasing agricultural productivity through “research, development and innovation,” including the use of more biotechnology.

Which makes more sense than having countries abandon efforts to create more renewable fuels and become less dependent on oil, or requiring stockpiles of grain to keep prices low while people continue to go hungry.

The paper included the following table, which tracks corn prices, cost of production and the difference paid to farmers when input costs are higher. While FWW only focuses on the “pass through subsidies” these deficiency payments represented for ethanol producers, it rightly notes that the farm policy provides benefits for “all industries that rely on corn as a key input.” That includes livestock producers and food processors, two industries that use as much or more corn than ethanol production.

So, between 1999 and 2008, corn prices went from a low of $1.82 per bushel to a high of $4.20. Since 2005, the taxpayer has had to pay nothing for corn because the price has been more than the cost of production – which means corn growers have actually been able to make a profit on their crop instead of just break even. But production costs also continue to rise. If the price per bushel of corn was $1.82 in 2008 and input costs were $3.65 per bushel, the taxpayer cost could have been $1.82 per bushel, instead of zero.

Obviously, any industry that has corn as part of their own input costs, wants it to be as low as possible so they can make a profit, so it is understandable that those in the livestock and food processing business are unhappy with the higher corn prices. But, my question is, what is the ideal price for the commodity that would make everybody happy?

It would have to be at least slightly more than the cost of production for farmers to save taxpayers money, but farmers are impacted by some of the same input costs that affect all other industries, especially energy. As long as prices for fuel and other energy-related costs go up, production costs for every industry will rise.

The latest season-average farm price for corn is projected by USDA to be a record $5.50 to $6.50 per bushel compared with the 2010/11 forecast of $5.10 to $5.40 per bushel. But the cost of production is expected to be close to that, so what is a fair price in terms of the difference?

Please comment if you have an opinion. I’m curious to hear from both corn producers and users.

Shocking, I know. The article headline proclaims “Experts say energy, weather, unrest more likely responsible for higher food costs than farmers,” something the industry has been saying for years now.

The experts they cite include Iowa State University agricultural economist Chad Hart. “When you look at the cost of our food, it is related to the cost of corn, soybeans and wheat and cattle but also the cost of oil, gas, diesel and unrest in other parts of the world,” he is quoted as saying.

The article also pointed out the recent USDA report that estimates farmers now receive an average of just 11.6 cents of the food dollar. “While the commodity and food prices have been going up, the share going back to the farmer has been going down,” Hart said.

The original story, which also quotes National Corn Growers CEO Rick Tolman and Matt Hartwig with the Renewable Fuels Association, was written by reporter Michael J. Crumb. He should be thanked for giving the farmers’ side of the story for a change. What is even more amazing is that there are virtually no negative comments (at least yet) on the Forbes and Washington Post versions of the story, so go make some positive ones!