Jay O’Neil, Senior Agricultural Economist for the International Grains Program at Kansas State University, outlined four variables that can affect the price of food: commodity prices, fuel prices, world economic growth, and speculation. These variables, combined with weather-related problems in crop production, impact the price of food. Ethanol, however, does not have a large role in food prices.
“Ethanol had very little to do with it,” O’Neil said, referencing the world-wide run-up in commodity prices in 2008. The increase in world grain prices was due to a shortage in the wheat crop, in Australia, Europe, as well as the U.S. and Canada. Other commodities followed, and the subsequent increase in food prices was wrongly blamed on corn used for ethanol. The current drought in Russia affecting the wheat crop may bring another round of misguided “food or fuel” questioning if other commodity prices are affected.
O’Neil asked what we as Americans are more afraid of: corn prices increasing by 50 percent, or crude oil prices increasing 50 percent.
“Which of these scenarios would display the biggest threat to our economy?" he asked. "While ethanol gives America fuel independence and represents an investment in farm values, our dependence on crude oil negatively impacts our economy and our national security."
The second panelist was Bill Couser, owner of Couser Cattle Company of Nevada, Iowa. He is current president of the Iowa Renewable Fuels Association and serves on the board of Lincolnway Energy, also of Nevada.At his family-owned cattle feedlot, Couser said he witnesses first-hand that “food versus fuel” is an absolute myth. He delivers corn to the ethanol plant harvested on his farm, and then takes the co-product distillers grain home to incorporate into the feeding ration for his cattle. Not everyone realizes that only the starch portion of the corn kernel is used to make ethanol, and all the nutrients from the corn – fat, fiber, protein etc. – is returned to the feed/food supply in the form of distillers grain.
“Instead of ‘food versus fuel’ I like to say it’s ‘food, fuel, feed, and fertilizer’,” Couser said.
Couser also reminded the attendees of the importance of story. “Farmers, ethanol producers, and industry supporters alike need to tell their stories to lawmakers," he said. "It's these stories, coming from your mouths, that bring credibility to ethanol's story."