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Ethanol and food production: What's the connection?Some mainstream media came to a wrong conclusion while covering an economist's June 23 report to the Environmental Protection Agency. Their error then is still fueling controversy from the halls of Congress to the World Wide Web. These media "quoted" Keith Collins - the U.S. Department of Agriculture's newly retired, long-term chief economist - as telling the EPA that ethanol production has driven food prices up 30 percent. "Those media simply misinterpreted his findings," said Mike Woolverton, grain marketing economist with Kansas State University Research and Extension. Woolverton explained that Collins did say ethanol production's use of so much corn had, in fact, had an impact on food prices. When Collins brought up the actual percentage, however, he was talking about ethanol's part of last year's 4.3 percent rise in food prices. "Ethanol was responsible for 1.8 percent, and other factors accounted for the rest of the 4.3 percent increase. That's actually in line with what the current administration has been saying," the K-State economist said. "More impacts are to come, too, but not the great impacts that many people expect." Woolverton said he hopes Congress won't change too much when it revisits the mandated usage standards for ethanol. "Reducing or eliminating the mandate would give the wrong message to alternative energy producers," he said. "We're going to need alternative energy in all of its forms." June 23 was the end of the EPA's public comment period on a request from Texas Gov. Rick Perry. He had asked for a partial suspension of current Renewable Fuels Standard policies. Kraft Foods Global, Inc., had contracted with Collins to investigate the impact of biofuels on food and commodity prices. Farm Journal magazine still has the executive summary from his analyses posted on the Web at http://www.agweb.com/DiscussionBoard/topic.asp?TOPIC_ID=2334䧱. 7/21/08 Date: 7/15/08
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