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Edited on Mon Apr-28-08 09:24 PM by OmahaBlueDog
We have no corn shortage, although much of what we grow is not generally suited to human consumption. Maize/corn is simply not a huge food staple around the world, and your <<a little tweak of policy here or there and all the environmental benefits disappear and people starve to death>> is the kind of mindless comment that gives progressives a bad name. http://www.npr.org/templates/story/story.php?storyId=90006310&ft=1&f=1004In the above link, look on the article on Haiti. What is causing the food issue there. Is it corn? No, it's the spiraling price of rice. Are we making rice ethanol? No, not at this time. Can you grow rice on corn firelds? Not hardly. Oh but wait... http://www.journalstar.com/articles/2008/04/28/news/business/doc48122dfa23a59479761856.txtLook at the article in the above link. It turns out that rice is being bought by speculators, who expect the prices to rise. That's been combined by Asian nations limiting or banning exports of rice. Does this mean there's a rice shortage? "... here is no dearth of rice in the United States. The Department of Agriculture projects U.S. rice supplies this year will be 8.3 million tons, nearly unchanged for the past seven years. Because Americans consume just 10 percent to 15 percent of what residents of Asia’s big rice-eating nations devour, there’s plenty for domestic consumption, said Nathan Childs, a USDA market analyst....Rice consumption here is so low that as much as half of the domestic crop is exported."
Then, there's this, which I admint is corn industry propaganda, but has some excellent points:
Grocery Manufacturers Put Forth Hype By Rick Tolman, Chief Executive Officer National Corn Growers Association
Regular readers of this column know I am proponent of biofuels and its benefits to our environment, economy and energy independence – and a proponent of agriculture solutions to help ease our energy woes. I am also an outspoken advocate of representing issues fairly and accurately.
I respect there are two sides to every issue and the media is the outlet for presenting those sides. However, as a keen media observer, it’s apparent the incline of the media slant is increasing. Maybe it’s the 24-hour, up-to-the-second news cycle. With such pressure to deliver, it seems fact checking has slipped. This past weekend the New York Times ran a story on bloggers feeling the stress of delivering news-breaking content in such a rapid-fire manner with some even going so far as to suggest a quiet news period each day.
Now there’s an interesting concept. Just imagine how that might reduce the media hype. The hype such as that put forth by the Grocery Manufacturers Association claiming corn for ethanol is the force behind rising food prices. Never mind the fact that the price of a barrel of oil is at an historic high and climbing. Never mind that economists tell us that a $1 increase in gasoline will squeeze your food budget two to three times more than a $1 increase in a bushel of corn Never mind the fact that a Merrill Lynch economic analyst told the Wall Street Journal that ethanol has helped ease fuel prices by 15 percent. Imagine, if you will, the impact to your food bill of another 15 percent increase in the price of a gallon of gasoline.
The GMA has a short memory as it is the same group whose members fought to stop development of drought-resistant biotech wheat. Wheat supplies tightened following a drought in Australia and short supplies elsewhere. Global demand and short supply were the culprits for rising wheat prices.
And I am not the only one to see the hype behind the GMA push. The other day, I received the email below from Bill Jorgenson, a consultant for the food industry, in response to an interview in E&E Climate with Scott Faber, GMA’s vice president of government affairs. In part, his letter states:
Scott Faber's comments from E&E News shows a disregard for fact. Biofuels do not use over a third of the corn crop, the figure is closer to 20%.
A third of the price of food commodities today is due to hedge funds, as in the case of oil, playing with markets.
Rice crops have not been impacted by acreage switch to biofuels one iota. Yet their price has risen second to most.
Ask Tyson why they are diverting all the chicken and beef fat from operations into biofuels with a petrol partner, instead of having the fat going into feed for animals to give the energy needed to the animal. Maybe that is one reason feed prices went up to their own operations.
Finally the choice of "burn your lunch for a ride home" when the profit margins of the food industry have risen by 50% with price increases (all not covered by increased expenses or the bottom line would not move) is what really brought me to ask if this is to divert attention or really concern.
In case you missed it, Brazilian President Luiz Inacio Lula da Silva on April 3 spoke out on this issue, telling reporters: "Today there are more people who eat. The Chinese eat, the Indians eat, the Brazilians eat ... and people live longer," arguing that the growing number of mouths to feed is causing the inflation in food prices.
Producers have not lost sight of their obligation to help feed the world. Nor have the companies who are investing millions of dollars to find solutions to feed humans, livestock and ethanol plants. Our growing global population is demanding more of those of us in the agriculture sector and we have delivered.
Don’t get fooled by the hype.
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Corn's Impact on Retail Food Prices: Five Truths
"What effect do these higher commodity costs have on retail food prices? In general, retail food prices are much less volatile than farm-level prices and tend to rise by a fraction of the change in farm prices." -- Ephraim Leibtag, USDA economist
1. Food in the United States has become more affordable. Americans spend just 10 percent of their disposable income on food expenses, the USDA reports, while households in countries like India often spend 50 percent of their budget on food. Even countries in Europe spend more than twice what U.S. consumers spend on food costs. And the amount Americans have been spending on food over the years (as a percentage of their income) has decreased significantly.
2. Food price increases are overall stable. Over the years, with a few exceptions, food prices have followed or slightly trailed overall inflation. Recently, the U.S. Department of Agriculture reported that marginal increases in retail prices due to higher energy and other costs are projected to continue and lead to food price increases somewhat greater than general inflation through 2009. After that, however, retail food prices are estimated to increase at less than the general inflation rate. For some perspective, food inflation was 4.0 percent in 2007, compared to the 25-year average of 2.9 percent.
3. Farm products such as corn are a small part of the food bill. Numerous cost factors contribute to retail food prices. According to USDA, labor costs account for 38 cents of every dollar a consumer spends on food. Packaging, transportation, energy, advertising and profits account for 24 cents of the consumer food dollar. In fact, just 19 cents of every consumer dollar can be attributed to the actual cost of food inputs like grains and oilseeds.
4. Corn is an inexpensive food ingredient. At $4 per bushel, the average price in 2007, corn costs 7 cents a pound, so fluctuations in the price of corn are not often reflected in the retail prices for food items. Even a standard box of corn flakes contains approximately 10 ounces of corn - less than a nickel's worth. And while corn is a more significant ingredient for meat, dairy, and egg production, it still represents a relatively small share of these products from a retail price perspective. The USDA reports that higher corn prices pass through to retail prices at a rate less than 10 percent of the corn price change.
5. We have production and supply to meet all corn demands. Corn growers are not only growing enough corn to meet all demands - but to carry over a surplus into the next year. For 2007, that carryout was 10 percent of production. One reason for our success is increased yield, or bushels grown per acre. And also thanks to technology improvements, we are getting more efficient when it comes to producing ethanol and developing valuable uses for its coproducts, such as grain that provides good nutrition for livestock.
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