Corn Commentary

Will They Admit Their Error?

From Reuters, today:

Ethanol no longer seen as big driver of food price

Heavy demand for corn from ethanol makers was seen as a key driver of corn futures to record highs in June, but since then the sharp decline of corn along with other commodities shows that belief was mistaken.

“The record high prices were a speculative bubble,” said Stewart Ramsey, senior economist for Global Insight, Philadelphia.

Duly Noted and Quoted

Back in August, when the U.S. Environmental Protection Agency upheld the renewable fuels standard, ethanol critics were disappointed. Scott Faber, the Grocery Manufacturers Association, was quoted saying that the Bush Administration lost a chance “to immediately reduce food prices and, more importantly, to avoid the certainty of much higher food prices in 2009.”

How immediate would that reduction in food prices have been? Faber never said, and now we know why. As much as corn prices have decreased since reaching a peak in August, there seems to be no intention to lower prices. Here’s another quote from Faber, from an Oct. 17 Wall Street Journal story that looks into how food prices are remaining high, despite much lower prices for commodities suich as corn, soybeans and wheat: “The impact of [higher priced] corn is continuing to work its way through the value chain and will continue to be reflected in higher grocery prices for some period.”

If anything gets reduced, it’s the size of food packages in grocery stores, as noted in a post below.

Feeding and Fueling the World

World Food Prize Ed SchaferThe answer to feeding a growing world population lies with building on the success of the American farmer, according to Agriculture Secretary Ed Schafer, who addressed the World Food Prize breakfast last week in Des Moines.

“Our focus should be on sharing our technology, equipment and know-how, processes and procedures to help farmers all over the world boost the productivity of their land,” Schafer said. “Just in the last 15 years, our corn yields have increased from an average of 100 bushels per acre to 150 bushels per acre, a 50 percent increase in yield in 15 years.”

“Gains of this kind have allowed the United States producers to meet the rising demand for food and feed and fuel, while maintaining record level exports and strong food aid donations,” Schafer added.

Listen to Schafer’s comments regarding productivity here:

A Kernel of Truth About Corn Products

Grains For LifeI don’t know about you but I like corn in all its various forms, fuel for my body or fuel for my car. Here’s some new research that shows just how healthy the milled food products can be. Someone please get me a bowl of grits! Corn – a Grain For Life.

New research just published in the October issue of the Journal of Agricultural and Food Chemistry reveals significant health benefits in milled yellow corn products. The study, authored by Purdue University professor Dr. Mario Ferruzzi, demonstrates milled yellow corn products are rich in antioxidants, especially carotenoids such as lutein. Additionally, the bioaccessibility level of carotenoids milled corn products is high, often more than 50% bioaccessible.

Carotenoids are yellow and orange plant pigments known for their association in the prevention of chronic diseases including cancer, cardiovascular disease and macular degeneration. Vegetables such as carrots, spinach and tomatoes are frequently associated with high levels of carotenoids; however, given the findings of this study, milled yellow corn products should be included in this category of antioxidant-rich foods. (more…)

European Biotech Resistance

It was pretty evident at last week’s World Food Prize symposium in Des Moines that European nations remain the most resistant to biotech crops. But some farmers are bucking the system.

World Food Prize TATT AwardOliver Ransmann of Germany participated in a Truth about Trade and Technology farmer roundtable that included over 20 producers from nearly as many countries discussing the benefits and challenges of biotechnology in their parts of the world. I had a very interesting conversation with him about the lack of acceptance of biotech in his country and Europe in general. He just started using Monsanto’s corn borer resistant genetics two years ago on his 400 ha farm that grows mainly corn and rye to generate biogas. He talked about the stringent government regulations on biotech crops and the general distrust of biotech by both farmers and the general public.

He told me that farmers who choose to grow biotech crops in Germany are “branded” in a way and subject to vandalism. “This year my ground was damaged by activists – we had iron sticks in the fields and spoons and knives in the grain,” he told me. “We can’t understand why people are doing it and it’s very dangerous.”

So why does he still choose to grow biotech crops on his farm? “If I’m not using Bt maize, I have 30-40 percent less productivity and I can’t afford it,” he said. He understands that biotech varieties offer environmental benefits by allowing farmers to use less chemicals and to produce more on less land, but he says that message is being ignored in Europe.

Listen to an interview with Oliver here:

High Food Prices Sticking Around

stickyEven though grain and energy prices have dropped significantly in recent weeks, higher food prices may have more sticking power than gum on the bottom of a shoe.

The reason being given by the economic experts is “sticky prices,” according to this AP story. “That’s what analysts call it when companies slap higher prices on products and keep them there even though the rationale for the price hikes — such as soaring oil prices — is gone,” the story says.

Some folks would really like to get to the bottom of this whole food price mystery. Last week on World Food Day, FoodPriceTruth.org launched “Operation Missing Cookie” after discovering that Kraft and other companies were reducing the weight content in packages of food items such as Chips Ahoy cookies and selling them at the same price.

Food Price Truth“Kraft pointed the finger at higher operating costs, but their profits are up 24% this year compared to last year,” the organization noted, calling such statements from food companies misleading and disingenuous. “These companies pretend that they are suffering at the hands of higher energy and grain prices like average Americans, but it’s really about squeezing more money out of the consumer.”

FoodPriceTruth.org compiled a chart of familiar food items showing up to 25 percent weight reductions in common food items like cheese, mayonnaise and ice cream.

Sticky prices simply mean that food companies are sticking it to consumers – and that’s even more disgusting than finding gum on the bottom of your shoes.

Increasing Productivity to Feed the World

Several speakers at the World Food Prize symposium this week in Des Moines were from the major agricultural chemical companies, including Monsanto, Syngenta and Pioneer.

World Food Prize Paul SchicklerPioneer Hi-Bred International president Paul Schickler was on a panel that focused on the “Promises and Challenges of Next-Generation Science and Technology.” He took the first question to the panel, which was “How optimistic are you that the world can reduce hunger by half by 2015?”

Schickler stated that he was very confident that goal could be reached, simply on the basis of increased food production, using hybrid corn as an example. “If you look back throughout the development of hybrid corn, productivity has improved at about one and a half percent per year,” he said. “As we look to the future, we think we can double that, and that has already started to show up in the last 8-10 years through the use of biotechnology, plant genetics and improved agronomic practices.” That would mean corn yields in the United States could hit 210 bushels an acre in ten years, and what that means is increased sustainability because more food can be produced on less acreage.

Listen to Paul’s answer to that question here:

Roasting Corn Down South

Roasted CornRon is the roasting man at Sunbelt Ag Expo. I caught him roasting some ears of corn early in the morning before his booth was busy, although he says that there are people who like a corny breakfast.

He cooks with propane and says he does about 75 ears at a time. He like the combination of yellow and white sweet corn because it looks good and is very tasty. He says a key to a good ear of roasted corn is to cook it hot and for about a half an hour.

As you’ll hear Ron say in this video, “we dip it in some butter and you’ll grin from ear to ear.”

International Focus on Distillers Grains

Distillers grains are often called the “best kept secret” about the ethanol industry – the one-third of corn that comes back as livestock feed as a result of ethanol production.

DDGs have also become a major value-added export for the United States. Exports of DDGs expected to hit 3 million metric tons valued at an estimated $600 million this marketing year and next year they are projected to reach at least 4 million metric tons at $800 million.

The U.S. Grains Council and USDA’s Foreign Agriculture Service are helping to get the good word about DDGs out by co-sponsoring the International Distillers Grains Conference with approximately 140 major foreign buyers, nutritionists, and feed ingredient importers expected to attend. The meeting will be held October 19-21 at the Indianapolis Marriott Downtown.

Registration for the conference is still open on-line at distillersgrainsconference.com.

Where Would Prices Be Without Ethanol?

Here is an impressive table of stats put together and published last month by Iowa State University economist Robert Wisner.

In an article published by ISU’s Ag Marketing Resource Center, Wisner says, “No one knows precisely what impact the rapid growth in the production of biofuels has had on corn and soybean prices, but the evidence below suggests it has been substantial.”

Corn Price Table 1

Corn Price Table 2

Now, with the recent huge drop in commodity prices, this scenario may not play out quite as well, but it does appear that ethanol has had a pretty big impact on corn prices.



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