FPF Fact Check: WSJ Editorial Doesn’t Pass the Commonsense Test
The headline in a recent Wall Street Journal editorial read: “Paying for ethanol at the pump and on the plate.” It caught our eye for the fact that it doesn’t even pass the commonsense test. Gas prices are way down and projected to stay that way. So, too, are corn prices.
The article then cherry-picks historical pricing data in an attempt to vilify U.S. ethanol production without providing any market context.
For example, it blames ethanol policy for a few years of higher corn prices without ever mentioning the unprecedented Midwest flooding, the historic Corn Belt drought, or the expanded export opportunities over the same period.
Likewise, it blames ethanol policy for higher grocery prices without acknowledging other pricing factors, such as animal disease or the decreased herd size. After all, if feed costs are the primary driver in protein pricing, shouldn’t the cost of poultry, meat, eggs and dairy all be plummeting alongside corn?
In fact, the Economic Research Service (ERS) explained in a recent report that after an increase in 2008, food price inflation is down. For 2015, ERS “predicts that supermarket prices will see normal to slightly-lower-than-average food price inflation.”
Ethanol critics were, unfortunately, given a free pass to attack America’s farmers when corn prices climbed – for the first time in decades – between 2008 and 2012. Now that prices are returning to past levels, these same critics should be held accountable.