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A balanced approach to food and fuel production is a requirementBy Doug Rich
Whether you refer to it as "food versus fuel," "food or fuel," or "food and fuel," the topic makes for a lively debate. The Agricultural Business Council of Kansas City sponsored a Food and Fuel Forum Oct. 23, during the American Royal. Biofuel proponents and food use proponents squared off to present their sides of the debate. Blake Hurst, first vice president of the Missouri Farm Bureau Federation, linked rising corn prices to popcorn in movie theaters. "Google 'popcorn prices' and you'll find dozens of stories in the past year linking ethanol and popcorn prices in theaters," Hurst said. "The stories all describe beleaguered movie operators forced to raise prices on popcorn and movie tickets to pay for the ethanol-induced boom in popcorn prices." In fact, Hurst said, the increase in popcorn prices at the farm level costs movie theaters about a dime for each $5 bag of popcorn. Hurst said there were stories this year, which stated an average person can be fed for a year on the corn used for the ethanol it takes to fill an SUV. Each bushel of corn can produce 2.6 gallons of ethanol, which means it would take about 12 bushels to fill up an SUV. "If we ate nothing but corn meal, we would have to eat five pounds of corn meal a day to use up our corn crop," Hurst said. "It would take a lot of honey to choke down that much corn bread." Hurst said there are a lot of reasons for increased food prices including rising fuel prices, the decline in the value of the dollar, and inflation in the overall economy. "If ethanol is contributing to the increase in food prices, it has also mitigated the increase in gasoline prices, meaning that ethanol has positive and negative effects on family budgets," Hurst said. World grain supplies play a role Robb MacKie, of the American Bakers Association, said he is a little worried about world grain supplies. MacKie referred to an Oxfam International report that states 17 million people in Cambodia face starvation and that a third of the rural population in Tajikistan are food insecure. MacKie said this is happening when everything from fuel to food is more expensive. He attributed the rise in food prices to historic low stocks, higher standards of living around the world, higher domestic demand, weather, government polices such as the blenders credit, and even locusts. Food inflation in the United States was 5.1 percent in 2007 and 5.5 percent in 2008 according to MacKie. "Americans can expect to pay 14 percent of their income on food in 2008 compared to 9 percent in 2007," Mackie said. To restore the balance between food and fuel, the American Bakers Association (ABA) has formulated an action plan. ABA recommends early release of acres from the Conservation Reserve Program, easing the Renewable Fuels Standards (RFS) for ethanol, allowing more imports of ethanol, and increasing basic research for wheat to improve yield and quality. "We need to tone down the rhetoric on both sides and work together, from the farm to the table," MacKie said. Enough corn for all uses Back on the biofuels side of the argument Ken McCauley, past chairman of the National Corn Growers Association and a Kansas corn farmer, said there is enough corn to go around. "We can find and boost new markets like ethanol while meeting all other needs and being responsible stewards of the land," McCauley said. "We have the technology to significantly boost corn production and there is more technology in the pipeline." In his presentation McCauley noted 29 percent of this year's corn crop would be used for ethanol production while 39 percent would go to feed and residual uses, 10 percent to food and seed, 15 percent to export and 8 percent for ending stocks. "Here we are this year with a good crop in the face of adversity," McCauley said. The number of bushels of corn produced per acre is going up at the same time that the gallons of ethanol per acre are going up. In 2002, the average corn yield in the U.S. was 129 bushels per acre. That increased to 151 bushels per acre in 2007 and is expected to increase to 180 bushels per acre by 2015. The number of gallons of ethanol per acre has increased from 350 gallons in 2002 to 435 gallons in 2007 and is expected to be 575 gallons per acre by 2015. McCauley said his farm in northeast Kansas would average 200 bushels of corn per acre this year. Bigger yields are attributed to plant breeding, agronomics, and biotechnology. The efficiency of ethanol production facilities is also expanding. The newest ethanol plants are 35 percent more efficient than the plants in operation in 2004. Despite higher corn prices, according to McCauley, increased feed and costs for farmers and food manufacturers pass through in retail prices at a rate less than 10 percent of the corn price change. "A one dollar increase in the price of gas has triple the impact as a one dollar increase in the price of corn," McCauley said. Food security for the poor Don Gustafson, director, North American Liaison Office Food and Agriculture Organization, said the poor are hit the hardest by any increase in the price of food staples. Gustafson said poor households spend 75 percent of their income on food purchases. "Most farms in developing countries are small and farmers buy more food than they produce," Gustafson said. "Biofuels offer farmers in developing countries, if allowed, the chance to compete." However, Gustafson said subsidies distort allocation of resources and constrain options of developing country farmers. Government policy needs to take these people into account. Gustafson said biofuels are one of several drivers of high food prices. These key drivers include: Economic growth and changes in diet, declining investment in agriculture, declining cereal stocks, weather-related production shortfalls, rising energy costs, and export restrictions, in addition to the rapid growth in biofuels. "We need to insure that the group which is already in crisis gets attention," Gustafson said. "The underlying problem of hunger will be there for some time." In his introduction, Gustafson said he probably is the only person on the panel ever to own a car powered by 100 percent ethanol. He owned this car while living in Brazil where 50 percent of the sugarcane crop goes into ethanol production. The final word on the food and fuel debate goes to the first speaker at the Food and Fuel Forum, Morton Sosland, Editor-in-Chief of Sosland Publishing Company. Sosland said he believed anything standing in the way of expanding the market for bread and similar foods, such as extraordinarily high prices, insufficient and poor quality crops, misguided government interventions and phony diet programs, is to be opposed with utmost fervor. "Agriculture ought to have a central position in the independent production of energy that America is now pursuing," Sosland said. "Achieving that in balance with food requirements is both a serious challenge and a fantastic opportunity that merit our most earnest attention." Doug Rich can be reached by phone at 785-749-5304 or by e-mail at richhpj@aol.com. 11/24/08 Date: 11/20/08
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