Viewpoints

The Food vs. Fuel Debate Needs to Get Serious

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Sen. Ben Nelson, D-Neb., went on the defensive during last week's Senate committee hearing organized to address the food-vs.-fuel debate over corn and ethanol.

“Corn-based ethanol is not perfect, but it's been blamed for practically every problem under the sun,” Nelson said. “What's next? Summer colds? Computer viruses? Bad hair days?”

To some extent, Nelson is right. Several factors are responsible for driving the price of corn futures from less than $2 per bushel in 2005 to a recent peak of almost $8 per bushel in June. Growing meat and dairy consumption in the developing world has caused the demand for animal feed to rise, even as droughts in several countries have tightened global grain supplies. With stock markets sinking and currency markets looking shaky, many non-commercial speculators have jumped into the commodities markets, raising futures prices and creating more volatility.

But whatever it is that's causing corn prices to skyrocket, meat and poultry producers — as well as food industry groups, including the Grocery Manufacturers of America — won't find Nelson's quip the slightest bit amusing. Higher corn prices have been a boon to many of Nelson's constituents, but have stung other farmers and have contributed to food price inflation.

Meanwhile, ethanol producers and row-crop growers have banded together in public relations efforts, hoping to deflect the blame. Lately, they're trying to paint food suppliers as hypocrites.

“Blaming biofuels for high food prices is a great trick for these large food corporations. They get to raise their prices, increase their profits and not worry about how it affects American families struggling to make ends meet,” Brooke Coleman, a spokesperson for FoodPriceTruth.org, said in a release last week.

If there's a way to stabilize and lower corn prices, something needs to be done. If there's an efficient way to reduce America's dependence on foreign oil by making fuel from plants, something needs to be done. FoodPriceTruth.org isn't helping to achieve either goal when it characterizes the ethanol debate as a “smear campaign” against the biofuels industry. This only muddies the waters and confuses consumers. It is obvious to anyone who has watched this issue unfold that federal ethanol mandates have caused demand for corn to mushroom during the past three years. With rising demand comes rising prices.

There's no “smear campaign” here, and this issue is too important to drag down to the level of name-calling stupidity now masquerading as public debate in America.

Fortunately, the price of corn has eased off of record highs. Reports of a bumper crop in the Midwest helped lead futures prices down to recent lows around $5. Unfortunately, non-commercial speculators are apparently still aggressively playing the market. Any unfavorable news about the U.S. dollar lately leads to another spike in corn prices. Last week, corn was up to $6.20 again.

High, volatile prices for corn are a problem. Without an honest debate, we can't work toward a future where renewable fuels are the norm and the prices for other necessities are still reasonable.

Contributors

David Orgel

David Orgel is executive director, content & user engagement, of Supermarket News (SN) and its website, SupermarketNews.com. Orgel delivers his opinions on industry trends through a bi-weekly...

Carol Angrisani

Carol Angrisani is an associate editor at Supermarket News. Along with covering the packaged goods beat, she also manages SN’s annual private-label and ethnic marketing supplements. Carol...
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