| Jamie Dupree |
The Politics Of Food Prices, Part 2
There has been a lot of talk in recent weeks about how increased efforts to grow corn for ethanol has skewed the corn market and food prices in general.
Not so argued farm state lawmakers, like Sen. Charles Grassley (R-IA) who waved a box of cereal at a news conference, telling reporters that farmers get less than a dime out of what's on your table.
"When a farmer gets so little out of a box of Corn Flakes, don't be blaming the farmer and ethanol for the high price of food," Grassley said.
At a hearing on food prices, several members in both parties did sound the Ethanol Alarm and they found some quick pushback.
"Nothing could be further from the truth," said National Farmers Union president Tom Buis.
"They need to look at the oil industry."
Other than corn and ethanol, the price of oil was tagged as having the most responsibility for higher food prices, especially when it comes to production and transportation.
But realistically, experts told a hearing that there were a variety of reasons - many of them different - for why grocery store checkout prices have gone up.
Let's take wheat, which makes flour.
"For wheat, I would lay most of the blame on world weather over the last two years," said US Department of Agriculture economist Joseph Glauber.
"We've had devastating drought in Australia and Australia is a major wheat producer," said Glauber, who also noted less production in Canada and Europe.
Lawmakers then asked about eggs, which have also jumped in price.
Glauber said the main reason was a drop in actual numbers of eggs, as chickens were diverted to other needs.
"Instead of laying eggs, a lot more went into the broiler market and were sold as meat," said Glauber, attributing that to world demand for chicken.
Sen. Charles Schumer then moved onto corn, which has become the prime target right now.
"How much would you attribute the increase in the price of corn to the move to mandate more production of ethanol?"
"Very little," replied Glauber, who summarized the various reasons for price increases to a weak dollar, rising energy costs, export and import restrictions, bio fuels and a general growth in demand for food around the world.
It's still won't stop Democrats and Republicans from knocking the corn and ethanol issue, especially since it feeds into the general unease about the US economy.
But it may not be the whole answer.
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