At a recent press conference, U.S. Department of Agriculture officials joined in the public conversation about the relationship between food prices and biofuels, stressing that the debate should not be about food “versus” fuel, but about the fact we can have both food and fuel.
“The press conference echoed our message to consumers that corn ethanol production plays just a small role in food price increases,” said National Corn Growers Association President Ron Litterer. “American corn farmers will continue to work to meet the country’s food, fuel, and feed needs.”
At the beginning of the briefing, Agriculture Secretary Ed Schafer put the current food and fuel debate into perspective. “Higher oil prices affect much more than just the cost of driving,” said Schafer. “They are actually one of the major factors behind higher food costs.”
Schafer reiterated that developing diversity in this country’s portfolio of fuels is an urgent matter and one that remains central to the country’s energy and food security.
USDA’s data revealed that higher food marketing and transportation costs, along with export restrictions have impacted food prices. USDA chief economist Joe Glauber stated that biofuels — such as ethanol — contribute to higher prices, but acknowledged that higher corn prices pass through to a retail prices at a small rate.
Glauber referenced a study by the Council of Economic Advisers showing the total global increase in corn ethanol production accounts for about 3 percent of the recent increases in global prices. Glauber noted the farm value of food costs is less than 20 percent.
Schafer added that the growing middle class abroad, prosperity in developing markets, and drought have impacted global food prices.
And he also responded to a reporter who asked about the Grocery Manufacturers Association’s “undercover campaign” against ethanol. Schafer acknowledged the association was behind the campaign and said that USDA’s data didn’t reflect the organization’s claims.