Ethanol. Right. Now.

More corn, more ethanol than ever before

This headline might sound like one that ethanol critics will appreciate, but it's not the whole story.  We're using more corn to make more ethanol than ever before -- yet food prices are down.  How's that for debunking the "food vs. fuel" myth?

The '09 corn harvest is now beginning, and America's farmers are once again showing why they're the best in the world.  The most recent USDA figures forecast the second-largest corn crop, an estimated 13 billion bushels.  The average corn yield is predicted at 164.2 bushels per acre, up a full 10 bushels per acre from last year. The number of acres expected to be harvest this year (79.3 million) is 1% larger than last year, but the total crop is expected to be 8% larger than last year -- proving how farmers are making every acre count.

Recent media reports are documenting decreasing prices at the grocery store. The American Farm Bureau's "Marketbasket Survey" for the July-September period, for example, showed retail food prices under a year ago for the fourth consecutive quarter and down 10% from one year ago. A healthy corn crop this fall will provide ample supplies of corn for all important uses -- food, feed, and fuel.

Thanks to America's farmers for all they do.

Valero cites productivity of American corn growers

Valero Energy Corporation has been in the ethanol-related news lately, the nation's largest refiner and now a producer of ethanol at 7 plants purchased from VeraSun Energy.  In an August 21st article in the Ft. Dodge, Iowa Messenger, Valero cited the productivity of U.S. corn growers as reason to forget the "food vs. fuel" debate.

"The American farmer continues to increase their productivity," said Bill Day, Director of Media Relations for Valero.  "The amount of production they're getting per acre is amazing."  These increased yields translate into plenty of corn for both fuel and food, Day told the newspaper. 

Read the article "Corn stats shift Valero stance: Energy giant reverses its food vs. fuel concerns."

The Houston Chronicle also covered Valero's ethanol story in an August 24th article, "Oil refining giant finds its raw material in cornfields."  Reporter Brett Clanton writes, "Valero's major entry into the renewable fuels business marks a break with a U.S. oil and gas industry that in recent years has rarely missed an opportunity to point out flaws with corn ethanol and government policies that support it."

Another interesting note: Valero CEO Bill Klesse has recently been elected Chairman of the National Petrochemical & Refiners Association (NPRA), a group that is one of ethanol's harshest critics.  How will Valero combine these roles as both ethanol producer and head of the NPRA?  Time will tell.  Stay tuned...

Senator Thune questions Vilsack on higher blends, land use change

http://www.youtube.com/watch?v=xlbbRtZ_GXQ

Follow this link to a video on YouTube showing U.S. Senator John Thune (R-SD) questioning incoming Secretary of Agriculture Tom Vilsack during a hearing of the Senate Agriculture Committee.  Senator Thune asks key questions relating to higher blends of ethanol, food prices, and land use change metrics.

USDA says there will be more corn than expected

The U.S. Department of Agriculture has raised by more than 20 percent (316 million bushels) the amount of corn they estimate will be on hand at the beginning of the fall harvest. USDA has also upped the total of the 2008 corn crop, increasing it 81 million bushels from the December estimate to 12.1 billion bushels -- the second largest corn crop on record.

A slowdown in ethanol production is lessening demand, and the larger number of estimated bushels is applying downward pressure on corn market prices.

There will be plenty of corn on hand for all uses -- feed, food, and fuel -- and perhaps food processors can begin passing along the savings to grocery shoppers.

Food manufacturers are making packages smaller

An interesting article in the Chicago Sun-Times recently confirms that many food manufacturers are making the packaging of their products smaller, offering consumers less for their money.

The article states: "Shoppers without a keen eye and a willingness to read the fine print on labels might have missed what has happened: Food manufacturers were downsizing packages, while keeping prices the same, as they passed on higher food costs to consumers."

Read the full article here:
http://www.suntimes.com/news/nation/1356955,w-food-packages-shrinking-general-mills123108.article

USDA notes '08 average corn prices is lower than in '07

In new supply and demand estimates released today, the USDA shows that the average price for a bushel of corn in 2008 is around $4 - lower than the average price in 2007. The National Corn Growers Associates points out that this proves that higher ethanol demand can be accommodated with little impact on corn and food prices.

NCGA's President, Bob Dickey, is a farmer from Laurel, Nebraska. In a press statement today he said, "Growers in 2008 overcame numerous obstacles to bring in a good crop and meet all needs for corn. One of our significant challenges has been dealing with higher costs for land, fuel, and fertilizer and trying to break even. The high prices for corn futures were unrelated to ethanol demand and did not always mean more money in the pockets of growers."

Posted by KB, 12/11/08

Corn prices are down, yet food prices are still up

As families prepare for their annual Thanksgiving dinner this week, they may want to look to food processing companies for answers as to why their grocery bills will be higher than last year.

"When corn was nearly $8 per bushel this summer, food manufacturers began an expensive and dishonest PR campaign to convince Americans that food prices were high due to the demand for corn-based ethanol.  Now that corn prices are below $4 per bushel, and we're grinding even more corn for ethanol than earlier this year, these same food companies are proving that good prices are high because they want them to be high," said Brian Jennings of the American Coalition for Ethanol.

Companies such as General Mills, Del Monte, and ConAgra have all reported a double-digit increase in sales during the last quarter, partly due to price increases. 

An Associated Press article (http://www.google.com/hostednews/ap/article/ALeqM5i7bcgQyokxAYSLttY7nF6jtG8_CAD94JDBN00) had an interesting statement by Chief Executive William R. Johnson: he said "commodity costs are coming down and Heinz will leave pricing in place, which will help boost margins. Heinz will invest in marketing and innovation to push its message of value to consumers, he said. The company is also looking at changing sizes of packages and providing new offerings to keep consumers wanting its products."

Posted by KB 11/24/08

Article: Growing evidence ethanol industry can produce food AND fuel

“There’s a growing consensus that ethanol is not responsible for driving up food costs, with new data to back it up,” said Joshua Morby, executive director of the Wisconsin Bio Industry Alliance. “In fact, many ethanol plants, like the one operated by Didion Ethanol, are producing both food and fuel from corn.”

Morby was in attendance at the “Balancing Energy, Food and Climate” conference today at UW-Madison. The conference featured presentations regarding the long-term sustainability of bio fuels as a fuel source, and offered more evidence that bio fuels like ethanol are not driving up the cost of food.

The article stated:  "In fact, rather than contributing to food shortages, ethanol plants are helping to provide food to needy areas."

The Didion Ethanol plant, located in Cambria, WI, is able convert a kernel of corn into both clean-burning ethanol and food products, the latter of which is sent to help feed starving people in Africa and Asia as part of the USAID Famine Relief Program.

“As myth after myth about ethanol is debunked, it’s time for bio fuels to play a larger role in meeting our nation’s energy needs,” Morby said. “Ethanol facilities like the Didion plant can both fuel our country and feed the world.

Check out the article here:
http://dailykenoshan.com/index.php?option=com_content&task=view&id=7111&Itemid=114

Posted by KB, 11/13/08

Senator Grassley asks Grocery Manufacturers to get honest about corn prices

U.S. Senator Chuck Grassley (R-IA) took it to the Grocery Manufacturers Association in a letter yesterday, asking them why they haven't passed along the savings to consumers now that corn prices have gone down.  Earlier this year GMA blamed ethanol and high corn prices as the reason they had to raise food prices, though today corn and other grain prices have fallen 50% from their spring highs.

"This indicates that while food processors were willing and able to immediately blame ethanol and rising corn prices for having to increase retail food prices, they won't be extending the same courtesy by lowering those prices with lower corn and oil prices," Grassley states in his Oct. 28 letter.

Now that grain and energy prices are down by half, "surely we can expect that the grocery manufacturers will pass on these savings to American consumers who are suffering from economic hardship," Grassley says.

Read his entire letter here: http://blog.foodpricetruth.org/wp-content/uploads/2008/10/grassley-letter-to-gma2.pdf

Reuters, Chicago Tribune report on high grocery prices despite low corn prices

The grocers (GMA) and Big Oil have financed a lot of unfriendly ethanol news headlines this year, so their PR war rooms must be working overtime to try and beat back this fair and balanced Reuters story that broke recently.

Sam Nelson, a Reuters writer, indicates in his article that "Heavy demand for corn from ethanol makers was seen as a key driver of corn futures to record highs in June, but since then the sharp decline of corn shows that belief was mistaken."

"Corn is down 50 percent from its high in June, even as the amount of grain used to produce renewable fuel in the U.S. remained the same."

So why aren't food prices lower now that corn prices have fallen from nearly $8 per bushel to $3.50?

According to a recent Chicago Tribune article, "Packaged goods-makers will do all they can to keep consumer prices high, even though their costs for wheat, corn, and other raw materials is falling."

So corn prices are down but food prices will remain high because GMA wants to profit at the expense of U.S. working families.

Link to Reuters article: http://www.guardian.co.uk/business/feedarticle/7914436

Posted by BJ, 10/27/08