John Block, former Secretary of Agriculture, Rick Tolman, CEO of the National Corn Growers, Tom Buis, President of the National Farmers Union, and Bob Dinneen, CEO of the Renewable Fuels Association, spoke today at a press conference about the rising cost of food. All four pointed to statistics showing that ethanol plays a small role in determining the cost of corn, and an even smaller role in determining the price of finished food. Rising demand from China and India, increasing oil prices, speculation, and the weak dollar were noted as the real culprits. Mr. Dinnen remarked that rising gas price are the largest factor contributing to increased food costs and that ethanol is helping to keep those gas prices from rising even higher.
Dinnen also pointed that through fractionation, food and fuel can be extracted from the very same kernel, redefining the debate, with ethanol on the side of food and fuel. Indeed, according to Mr. Tolman, American corn exports are at an all time high.
The entire transcript can be found at:
http://www.ethanolrfa.org/objects/documents/1692/food_and_fuel_presser.pdf
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T. Randall Fortenbery and Hwanil Park of the University of Wisconsin-Madison shows that ethanol production is not the driving factor behind increasing the price of corn. Increased food, alcohol and industrial demand for corn have had a greater impact than biofuels have. The report concludes that, “attempting to explain current price levels simply as a function of ethanol production is a bit naive and inaccurate.
