Brownfield Ag Network
The supposed impact of biofuels on food prices is a hot topic in Washington D.C. Earlier this week, the Washington Post published a three-part series that strongly linked corn-based ethanol to rising food prices. And Wednesday at the National Press Club, agricultural and ethanol industry leaders held a media event aimed at dispelling the idea that corn-based ethanol is responsible for the bulk of food price inflation. That press conference came less than 24 hours before the House-Senate Joint Economic Committee held a hearing on soaring food costs, which many in Washington are now referring to as "the food crisis."
National Corn Growers Association CEO Rick Tolman spoke at Wednesday's National Press Club event. He told reporters corn-based ethanol had been the victim of aggressive and well-funded smear tactics by its opponents.
"Bottom line - there's been a very clever marketing disinformation campaign directed at biofuels by those with deep pockets," Tolman said. "If you really want to know who the real axe murderer is that's slashing our grocery food budget, look at $4.00 a gallon gasoline; look at $120 a barrel oil."
National Farmers Union President Tom Buis agreed with Tolman. Buis, in a preview of his testimony before the Joint Economic Committee Thursday, emphasized that corn-based ethanol had nothing to do with short supplies of rice and wheat. And he pointed out the average food product travels a thousand miles before it reaches the restaurant or grocery store.
"You do the math with $4.50 a gallon diesel fuel, trucking these products around the country, and you'll find out just where the culprit is," Buis said.
And Renewable Fuels President Bob Dineen noted the irony of the claims that ethanol somehow increases food prices. Because the primary driver of food price inflation is fuel price inflation, according to Dineen, the exact opposite is true.
"One tool, indeed, perhaps the only tool that is helping to reduce those [fuel] costs and thus helping to keep food prices in check is ethanol," said Dineen.
All three men emphasized there are a number of factors impacting food prices, including increased global demand, crop failures in Europe and Australia and the influence of a vast influx of speculative capital into the agricultural commodity markets. And while they did acknowledge increased corn prices played a small role as well, they insisted oil price inflation is having the most impact on food prices.
On the other side of the argument, however, is the American Meat Institute, which joined 19 environmental and anti-groups in sending a letter to the Joint Economic Committee urging Congress to roll back all government support for ethanol. The letter claimed such a step os the only factor within the government’s control that could help ease food prices.
"We urge you and your colleagues to continue examining food-to-fuel mandates in the context of national and global priorities," the letter said. "We must quickly transition toward supporting solutions that don’t pit our energy needs against our food needs."
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