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May 1 – SOLUTION TO HIGH FOOD, FUEL PRICES IS MORE FOOD, MORE FUEL: Just
when corn growers were starting to think the world has lost its mind, or at least its grip on reality regarding food prices, the pendulum may be slowing if not swinging back the other way.
If you are a regular reader of these pages you may have heard me say it before that
once the media sinks its teeth into a juicy story, real or manufactured, they are like a lion with its teeth in a Gazelle’s neck. They are hesitant to release it until it stops moving or until their belly is full
or in this case until they exhaust an angle to a story.
The next step in this evolutionary process is someone will finally do something
novel and look for a new angle, or in this case, the real and complex story behind rising food prices. That process began this week as evidenced by some of the examples below.
Cliff May of the Scripps Howard News Service wrote the following today…
So what is really driving up the cost of food? For one, some of the world's poor
are not as poor as they once were. People in India and China, for example, have more money to buy more and better food. But that change has been relatively gradual. What's sudden is the sharp spike in oil prices --
40 percent this year alone, with oil now priced at well over $100 a barrel.
That makes it expensive to operate a tractor, expensive to get crops from farms to
factories, expensive for workers to get to the factories, expensive to transport the products to the stores.
Oil does not operate within a free market. Saudi Arabia, Iran and other members of
the OPEC oil cartel can -- and do - manipulate supply in order to maximize their revenues. And our transportation system has been constructed so that oil has a virtual monopoly as a transportation fuel.
These challenges will not be solved by declaring a "new economics." What
is needed is to get back to basics: Increase supplies of food and fuels and prices will come down.
Go to http://www.scrippsnews.com/node/32787 for the whole story.
ETHANOL VS FOOD DEBATE PITS INDUSTRY TITANS AGAINST EACH OTHER…From CNN Money”
http://money.cnn.com/news/newsfeeds/articles/djf500/200804300547DOWJONESDJONLINE000543_FORTUNE5.htm
DOES ETHANOL DESERVE THE BLAME FOR RISING FOOD PRICES? From the Hard Assets Investment Magazine -
http://seekingalpha.com/article/73420-does-ethanol-deserve-the-blame-for-rising-food-
IOWA SENATOR GRASSLY SPEAKS OUT ON ETHANOL: In a news conference in Washington, DC
today, Senator Chuck Grassley officially tackled the myths surrounding ethanol and corn prices and their role in rising food costs.
“Contrary to all the anti-ethanol propaganda, converting corn into renewable fuel
is not responsible for the likelihood Midwesterners will soon pay $4 for a gallon of gas or loaf of bread. Most experts agree that corn ethanol isn’t responsible for more than 10 or 20 percent of the total
increase in food prices. The fact is, $120 a barrel oil is the biggest culprit behind the rising cost of food. Another driving force is the surging demand for more and better food by an escalating
middle-income population in China and India. Sooner rather than later, the swelling ranks of consumers in these two exploding economies will also add millions more automobiles to the global transportation
fleet, further squeezing demand for crude oil. Increased global demand for all commodities, including rice and grains, has also played a role. The declining value of the dollar has made a contribution,
and the drought in Australia has also been major – some say maybe even the biggest -- factor. Critics can complain about ethanol until they are blue in the face. But using it as a scapegoat won’t fix
the nose-diving dollar, erase home foreclosures, release OPEC’s stranglehold over American consumers, end world hunger, or stop the global population from competing for limited natural resources,” Grassley said
in his remarks.
If you would like to see his entire statement feel free to contact the Illinois
Corn Growers Association office at (309) 557-3257.
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