Awake at the Wheel

The Smear
While the facts continue to debunk the food vs. fuel confusion, ethanol is feeling the heat from an effective smear campaign orchestrated by The Glover Park Group and the Grocery Manufacturers Association (a wealthy lobby of 300 food and beverage makers like Kraft Foods, McDonald’s, Miller Brewing, Dean Foods and ConAgra).

The Farmers
Despite studies showing that fuel prices, and commodities speculation are driving forces behind higher food prices, the smear campaign continues. Now America’s farmers are uniting to get their voices heard. http://www.rrstar.com/communities/x902822601/Farm-Bureau-upset-over-ethanol-smear-campaign

The Facts
USDA has completed a thorough analysis on Ethanol’s impact on food prices. Their studies show:

·      According to the USDA the US is readily able to produce enough corn to meet food, feed, export and ethanol demands.
·      Many factors are driving higher food commodity prices: rising costs for oil and fertilizer, the impacts of drought and other adverse weather conditions, export restrictions and taxes imposed on rice and wheat, all have affected the supply side of the ledger.
·      Across the board commodities have increased 47%. Food based commodities have not increased any faster than other commodities at 46% Oil has increased most at 68%.
·      Raw agricultural product costs account for less than 20 percent of the price of food. Prices consumers pay at the store are impacted most by marketing, labor and energy costs. The increase commodity prices has caused retail food prices to increase by about 5% in 2008.
·      Council of Economic Advisors estimates that 3 percent of the increase we have seen in world food commodity prices this year is due to the increased demand on corn for ethanol.

Ethanol has significant economic benefits
·      Biofuels have been shown to help control the cost of petroleum. Merrill Lynch commodity strategist recently said gasoline prices would be 15 percent higher if biofuel production didn’t exist
·      According to the International Energy Agency, the biofuels production that has been available to the United States and European markets over the last three years has cut the consumption of crude oil by one million barrels a day.

USDA Study
http://www.usda.gov/wps/portal/!ut/p/_s.7_0_A/7_0_1OB?contentidonly=true&contentid=2008/05/0130.xml