WASHINGTON The price of food is going up not by much, but enough to get noticed. Food prices are up about 4 percent over a year ago, higher than the overall inflation rate.
Americans are used to affordable food, so a price increase of only a few cents brings questions about who is to blame. It didn't take long for the news media to start running stories about how ethanol production is driving up the cost of corn and, by extension, everything from milk and meat to colas and cornflakes.
"Not so fast," say Farm Bureau and the National Corn Growers Association. The price of corn may be going up because of ethanol, but food prices are not going up because of corn.
We all know that energy costs have skyrocketed. The National Corn Growers Association says that has a much greater effect on food costs because it takes energy to produce, process, package and ship nearly everything we eat. Corn, however, is only one segment of the food market.
Farm Bureau also says rising energy prices are more to blame, along with weather disasters that have ruined crops, last year's low milk prices that have caused producers to cut production and low world supplies of wheat.
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"Ethanol is getting a bad rap because people aren't looking at all the other factors that are involved in food prices," says Farm Bureau economist Terry Francl. He says there is little evidence that any food category has been affected significantly by higher corn prices.
Agriculture advocates used to paste on a box of cornflakes the price of the corn it contained to show how small the farmer's share was. Things haven't changed the value of corn in a 12-ounce box was about 2.2 cents when corn was less than $2 a bushel. Today, it's still less than a nickel. That's not what you would call a big effect on the price of major brand cornflakes, which sells at $3.50 for a 12-ounce box.
Of course, nobody outside of agriculture complained when corn farmers were getting by on less than $2 per bushel. Now that they can get about twice that, thanks to ethanol, they are practically being blamed for taking milk from babies. That's unfair, especially since no one has been able to show a specific connection between ethanol demand and food prices.
The negative attention this "food vs. fuel" debate brings to ethanol is unfortunate since the growing use of ethanol is a good thing for our country. It reduces our dependence on foreign oil and it's better for the environment. And rising crop prices are good for rural America.
Farmers have a can-do attitude about meeting the demand for corn. And with a bumper crop expected this year, chances are there will be plenty of corn to go around. As one corn grower said, "There is no conflict between food and fuel we can produce both."
So much for the "food vs. fuel" conflict. Rather, it's a conflict between perception and reality. Lynne Finnerty
Editor's Note: Finnerty is the editor of FBNews, a publication of the American Farm Bureau Federation.
Retool farm bill to provide true safety net ROSEAU, Minn. I am writing in response to Ellen Arthur's letter ("Status-quo farm bill serves no good purpose," July 30 Agweek).
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I am not an expert on the farm bill, but if it is true that more can be done to help the most needy, I highly encourage this.
Thank you, Ellen Arthur, for having the courage to speak up. Thank you, Rep. Collin Peterson, D-Minn; Sen. Kent Conrad, D-N.D.; and Rep. Earl Pomeroy, D- N.D.; for your leadership. We trust they will make the right decisions regarding this bill. Erica Espe Take a risk in biodiesel
BISMARCK, N.D. The plan to build a biodiesel plant to make fuel from canola has been scrapped. There's no reason for satisfaction in that piece of news, but it should be taken in stride.
There were high hopes invested in the plan that would have built the facility in Minot, N.D. There also was money invested, some of it being North Dakota taxpayers' funds. But if the project had serious flaws or lacked economic viability the principals haven't disclosed what the precise case is, citing only its delays and false starts it's better that it were called off now than when a lot of construction had been undertaken.
The Minot Area Development Corp. board of directors effectively pulled the plug. The directors withdrew the offer of 110 acres of land in the southeast part of the city. There is a hard truth at work: Not every planned and existing project in the alternative energy field in North Dakota is going to thrive. Some, maybe several of them, most likely will fail. An estimate is that of all the ethanol production plants in the country, those on the drawing board and those in operation, one in three either will not be built or will perish.
The fate of Dakota Skies Biodiesel L.L.C. is regrettable on a number of scores. Several groups of backers gave the project the breath of life or stepped in to resuscitate it, including the North Dakota Farmers Union, a group of European investors that backed out in 2005 and the New York-based Kinetic Group that bought the project in December 2006.
The Kinetic Group is described as an "investment banking firm with an emphasis on renewable energy and alternative energy technology," including development of energy projects. It's not that the group lacked depth of experience, even though it's only about 6 years old. Its Web site lists successes in such things as ethanol, liquefied natural gas and geothermal power, as well as biodiesel.
Kinetic's chief executive, Jeremy Dockter, though listing a New York address now, is Bismarck raised. He was eager to bring a
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$75 million development to his home state.
It would have been a major consumer of canola, producing both the fuel and edible canola oil, 50 million gallons in total annual production of both combined. Dockter says that unfortunately, since the plant was designed specifically for the site, it is not readily doable elsewhere.
Money from state taxpayers, a total of $52,500 over a period of years, was granted to the project by the North Dakota Agricultural Products Utilization Commission.
Yes, it's money down the drain. But every company and agency trying to help something good come about sometimes has to risk a failure. Dakota Skies would have been good for the state's canola growers, needing the oilseed from 700,000 acres to run at capacity.
The opportunity for biodiesel production still is open, if not in Minot, elsewhere. That never will be known unless someone takes a calculated risk. Bismarck (N.D.) Tribune Wind energy good for western Kansas
HUTCHINSON, Kan. Everything, apparently, has its critics.
The vigorous opposition to wind energy has been a surprise, and the criticisms make little sense.
The latest place where wind has drawn rigid opposition is Hays, Kan., where a wind farm is on the drawing board on the city's southwest fringe. And that opposition just might kill the project.
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That would be a shame because harnessing the wind to create pollution-free energy is an altogether positive use of one of Kansas' greatest, but least appreciated, natural resources.
And the reasons for opposing it are mostly nonsensical. That some neighbors who are not getting any direct economic benefit are grumbling is understandable. But some of the other supposed drawbacks are silly.
One of them is the aesthetics. We suppose the people of Kansas' east-central Flint Hills had an argument there though not much of one. But this argument falls flat on the short-grass prairie of western Kansas, the grand vistas of which long ago were blemished by power lines, water towers and grain elevators.
They are not a noise problem, as some assert. And as for killing birds, that has not been documented.
Environmentalists' opposition is especially frustrating. Wind energy is, after all, renewable energy. If you don't like coal, fine. But wind?
And then we have some people ludicrously complaining that it somehow is wrong to export energy to users elsewhere. This same argument comes up whether it is the Hays wind farm or the Sunflower Electric coal-fired power plant expansion in Holcomb, near Garden City, Kan.
Kansas is not rich in many natural resources. But it is rich in wind. We can complain about the wind and complain about wind farms. We should complain about neither, for wind is an opportunity, and development of wind energy is brilliant.
Any western Kansas city ought to be thrilled over the prospect of developing a wind energy operation. Hutchinson (Kan.) News
