Thursday, July 12, 2007

Who ya gonna believe...

Me - or your own arithmetic skills? In one of the most astonishing displays of illogic I have read, a Missouri Congress member doubles back on the thread of cause and effect.
Thanks to well-thought-out Farm Bill support programs, our farmers persevere, and American consumers benefit. In developed nations around the world, most families have not earned enough money to buy food for the year until April or May, but the average American family has done so in just five weeks.

[Translation: Subsidizing corn makes the price lower, and hence food cheaper]

Our nation has chosen a wise strategic and economic course of ethanol and biofuel development. This goal increases corn prices, but it has a negligible effect on the price of food in America. It's worth remembering that the box part of a box of cornflakes costs consumers more than the corn does. [More]

[Translation: The price of corn doesn't affect food prices] [My Comments]
As I have said before those claims would be more convincing coming from the livestock industry. But wait, they have made a comment or two about ethanol and meat prices.
Thus, it is no surprise that the price of corn has doubled in the past year — from $2 to $4 per bushel. We are already seeing upward pressure on food prices as the demand for ethanol boosts the demand for corn: Nationally, food prices were up 3.9 percent in April, compared to the same month a year earlier. Until the recent ethanol boom, more than 60 percent of the annual U.S. corn harvest was fed domestically to cattle, hogs and chickens, or used in food or beverages. Thousands of food items contain corn or corn byproducts. A spokesman for one of California's largest cattle ranches and feedlots noted that since the end of 2005, the company has experienced a 36 percent increase in the cost of feed, "which translates to an additional expense of $101 per head raised." Reflecting these trends, the National Cattlemen's Beef Association has demanded an end both to government subsidies for ethanol and to the import tariff on foreign ethanol.

The poultry industry is also squawking. The National Chicken Council is demanding remedies from senators who represent the big southern poultry states, and the National Turkey Federation estimates that its feed costs have gone up nearly $600 million annually. [More]
Anyway, we may be on track to find out. Judging from the long-range forecast and our own Crop Comments, the food v. fuel debate could be about to heat up.

[Thanks, Chris]

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