Ethanol not to blame for price hikes

April 7, 2011

Throughout the past three years, there has been a deliberate effort to distort the truth about American ethanol’s ability to provide both fuel and food in this country, mostly from companies that seek to profit from high grocery store prices.

Anyone who is involved in America’s rural economy values the economic opportunity offered by ethanol production. It is a cleaner fuel than gasoline. It creates jobs here in the U.S., instead of sending money overseas. And there is no need to have ‘no-fly’ zones or post combat patrols through the Midwest to protect our ethanol supply.

Despite the enormous economic, national security and environmental qualities of ethanol, at the height of the last oil price spike in 2008 we saw a willfully-planned and well-financed propaganda campaign, paid for by the Grocery Manufacturers of America, to blame ethanol for rising grocery prices.

Since then, countless academic, economic and government studies, including the most recent World Bank study, have disproved the so-called “food vs. fuel” myth. Careful analysis shows that Wall Street speculators, high oil prices and the high costs of manufacturing, packaging and transporting all have far more impact than ethanol on the grocery prices that everyday Americans pay.

Yet there are still some who would seek to bury the truth and perpetuate the fiction that ethanol increases prices at the checkout counter.

One fact often overlooked by these critics is that more than a third of every bushel of corn used in ethanol production is returned to the food chain in the form of highly-valued, nutritious livestock feed. All that’s removed from the grain in making ethanol is the starch. The rest – all the protein, oils and fiber – is returned to the food chain in a form that replaces a greater volume of field corn, thereby saving livestock producers money. This co-product is called “Dried Distillers Grains,” or DDGs.

The problem, identified in a recent letter to Agriculture Secretary Tom Vilsack by two Midwest governors, is that the U.S. Department of Agriculture doesn’t maintain an accurate count of the DDGs and their impact on the corn market. The use of DDGS is almost entirely overlooked in USDA’s monthly corn supply and demand report, thus overstating the actual amount of corn used for ethanol two-fold – a wild distortion of the truth.

That is why we must ask for serious consideration of the proposal by the Governors Biofuels Coalition, led by Kansas Gov. Sam Brownback, and Minnesota Gov. Mark Dayton. In their letter to Vilsack, the governors ask that USDA include the use of DDGs from ethanol in the overall count of corn.

They state, quite accurately, that failing to include the accurate figure is leading to “damaging” mischaracterizations of how the country’s corn supply is put to use.

The value that these DDGs play in the overall food and feed supply are an important factor to include in any debate over our nation’s energy and food policy.

It is important that consumers understand the enormous contribution that farmers and livestock producers make to our nation’s food and energy supplies. Whether it is sweet corn or corn ethanol, rural America is helping to secure our nation’s economic, energy and environmental security every day. Today’s farmers are more productive than ever, because of technology and innovative farm techniques.

Both food and gas prices are rising across the country, hitting working American families where it hurts worst: in the wallet. But as policymakers in Congress and in state capitols across the country chart a future course to secure our nation’s food and energy supply, they deserve a clear-eyed, accurate account of how our nation’s corn harvest is used.

The Governors Biofuels Coalition offers wise counsel to Vilsack, and we encourage him – on behalf of every rural community that relies on agriculture for economic opportunity – to take steps toward embracing their proposal, and stop leaving corn uncounted on the table.

Author: Steven and Pamela Yoder raise corn, wheat, alfalfa, soybeans and cotton in Dalhart. They have farmed for nearly 30 years.

This article originally appeared in the Amarillo Globe-News on Saturday, April 3, 2011.