Washington, DC: Today Congressman Bob Goodlatte was joined by many other Members of Congress in sending a letter to President Barack Obama, Agriculture Secretary Tom Vilsack and Environment Protection Agency (EPA) Administrator Lisa Jackson urging them not to approve the current request submitted to EPA to increase the ethanol blend in gasoline. Raising the ethanol blend above 10% could result in serious economic consequences that could negatively affect already struggling American consumers.

“Raising the ethanol blend requirement could decrease automobiles’ fuel economy while at the same time increasing food costs for all Americans,” said Congressman Goodlatte. “These are real consequences that must be addressed, especially given this tough economic time. Before EPA makes a decision on increasing the ethanol blend, they should examine how an increase in the blend requirement will affect fuel economy of vehicles and already rising food costs.”

Since ethanol has lower energy content per gallon more fuel is required to travel the same distance, which will mean drivers will have to fill their gas tanks more frequently. In fact, the Department of Energy (DOE) has begun assessing the use of ethanol blends and their effects on vehicle performance. In their recent report, the DOE tested 13 different vehicles with ethanol blends up to 20% and, on average, fuel economy of the vehicles decreased by over 7 percent.

Additionally, the letter calls on EPA to examine how an increase in the ethanol blend will affect other aspects of our economy, such as food prices. Ethanol is a major driver of corn prices. Last year we saw the price of corn reach record highs resulting in increased costs for consumers and livestock producers. As a result of the record corn prices, food prices increased as farmers shifted land from these commodities to plant corn. Increasing the ethanol blend will only further exacerbate this problem.

Goodlatte continued, “While I am a strong supporter of renewable fuels, increasing the ethanol blend will have unintended consequences for many Americans.”

An Iowa State University agricultural economist who is famous for criticizing the ethanol fuel industry recently made his third appearance in a row at the annual North Dakota Grain Dealers convention. The entertaining economist, Dave Swenson, says he has no idea whether ethanol will be around in another 10 years, but technological feasibility doesn’t necessarily mean economic feasibility, and economic feasibility doesn’t necessarily mean environmental, political or social feasibility. “Politics often leads to sub-optimal programs and policies,” Swenson says. While the industry has been very beneficial for rural capital investment, Swenson continues to wonder “what kind of productivity are we adding to our rural space?” A specialist in rural economic development, Swenson measures this in rural jobs and notes that while ethanol plants offer a few higher-paying engineering jobs, they also displace larger numbers of workers if the grain were used as livestock feed.”

“The Bureau of Labor Statistics reported that the Consumer Price Index fell by a seasonally adjusted 0.7 percent in December, its third consecutive monthly decline, after sliding 1.7 percent in November. The so-called core rate, which excludes volatile food and energy costs, was unchanged.

“For all of 2008, consumer prices grew just 0.1 percent while the core rate rose 1.8 percent, the Labor Department reported.”

The Times article added that, “Economists have warned that prices will probably be flat or continue falling in 2009 as the recession drags on and lower energy costs work their way through the ladder of production.”

More specifically with respect to food, Friday’s price report indicated that, “The food and beverages index was virtually unchanged in December, as increases in the indexes for food away from home and alcoholic beverages offset a 0.4 percent decline in the food at home index.

Within food at home, the indexes for three of the six major grocery store food groups declined. The fruits and vegetables index declined 2.4 percent in December, the fourth consecutive decrease, with fresh vegetables down 4.4 percent. The index for dairy and related products turned down in December, falling 0.9 percent after rising 0.4 percent in November. For the year, the indexes for fruits and vegetables and for dairy and related products rose 3.4 percent and 2.7 percent, respectively. The index for meats, poultry, fish and eggs declined 0.5 percent in December, but was up 5.1 percent for the year. The December decrease was driven by a 6.6 percent decline in the index for eggs. The indexes for cereals and bakery products and for other food at home both increased in December. The former index rose 0.3 percent in December and posted an 11.7 percent 12 month increase, while the latter climbed 0.6 percent and was up 9.3 percent for the year. The index for nonalcoholic beverages was virtually unchanged in December and has increased 5.9 percent since December 2007. The index for food away from home advanced 0.3 percent in December while the alcoholic beverages index increased 0.6 percent.”

Anticipating renewed debate on food v fuel in the New Year, I attach several relevant studies that appeared during the past six months.

Bruce Babcock, Breaking the Link between Food and Biofuels, Iowa Ag Review, Summer 2008, Vol. 14, No. 3

Juan Delgado and Indhira Santos, The New Food Equation: Do EU Policies Add Up? Bruegel Policy Brief, Issue 2008/06 July 2008

Douglas Auld, The Ethanol Trap: Why Policies to Promote Ethanol as Fuel Need Rethinking, C.D. Howe Institute Commentary, No. 268, July 2008

Keith Collins, The The Role of Biofuels and Other Factors in Increasing Farm and Food Prices, Kraft Foods Global, Inc., June 19, 2008

Dennis Avery, The Massive Food and Land Costs of U.S. Corn Ethanol: An Update, Competitive Enterprise Institute, October 29, 2008

Thomas E. Elam, Biofuel Support Costs to the U.S. Economy: The Key Role of the RFS in a Feedstock Shortage Scenario, FarmEcon LLC, June 28, 2008

Michelle Perez, Biofuels and Bad Weather: America’s Food-to-Fuel Gamble, June 13, 2008

Philip C. Abbott, Christopher Hurt, Wallace E. Tyner, Farm Foundation Issue Report, What’s Driving Food Prices? July 2008

International Food Policy Research Institute, High Food Prices: The What, Who, and How of Proposed Policy Actions, Policy Brief, May 2008

International Monetary Fund, Food and Fuel Prices-Recent Developments, Macroeconomic Impact, and Policy Responses, June 30, 2008

World Bank, Rising food prices: Policy options and World Bank response, April 2008

Mindy L. Baker, Dermot J. Hayes, Bruce A. Babcock, Corn-based Biofuel Production under Acreage Constraints, Center for Agricultural and Rural Development, Iowa State University, Working Paper 08-WP-460

Lihong Lu McPhail and Bruce A. Babcock, Short-Run Price and Welfare Impacts of Federal Ethanol Policies, Center for Agricultural and Rural Development, Iowa State University, Working Paper 08-WP-468, July 2008

Oxfam Briefing Paper, Another Inconvenient Truth: How biofuel policies are deepening poverty and accelerating climate change, June 25, 2008

Renewable Fuels Agency, The Gallagher Review of the indirect effects of biofuels production, July 2008

Renewable Fuels Association, Estimating the impact of increased ethanol production on U.S. household spending, June 3, 2008

Richard K. Perrin, Ethanol and Food Prices - A Preliminary Assessment, University of Nebraska, 2008

By Ann Bagel Storck on 11/17/2008

A coalition of groups including the National Turkey Federation, the American Meat Institute, the National Chicken Council and the National Cattlemen’s Beef Association plans to gather in Washington Tuesday to ask Congress and the next administration to repeal ethanol subsidies.

The coalition, which also includes environmental organizations, government watchdog groups and hunger advocates, will also share the results of a recent Ipsos Omnibus Survey that “point to overwhelming concern across the U.S. about rising food prices and shifting attitudes toward corn ethanol,” according to a news release about the event.

In the news release, the coalition noted that since Congress created the first subsidy for ethanol 30 years ago, those subsidies have increased to cost taxpayers nearly $5 billion annually.

ROME - A United Nations food agency called on Tuesday for a review of biofuel subsidies and policies, noting that they had contributed significantly to rising food prices and the hunger in poor countries.

With policies and subsidies to encourage biofuel production in place in much of the developed world, farmers often find it more profitable to plants crops for fuel than for food, a shift that has helped lead to global food shortages.

Current policies should be “urgently reviewed in order to preserve the goal of world food security, protect poor farmers, promote broad-based rural development and ensure environmental sustainability,” said a report released here on Tuesday by Jacques Diouf, the executive director of the United Nations Food and Agriculture Organization.

In releasing the report, the United Nations joined a number of environmental groups and prominent international specialists who have called for an end to - or at least an overhaul of - subsidies for biofuels, which are cleaner, plant-based fuels that can sometimes be substituted for oil and gas.

In a devastating assessment released this summer, the Organization for Economic Cooperation and Development concluded that government support of biofuel production in member countries was hugely expensive and that it “had a limited impact on reducing greenhouse gases and improving energy security.” It did have “a significant impact on world crop prices” by helping to raise them.

“National governments should cease to create new mandates for biofuels and investigate ways to phase them out,” the Organization for Economic Cooperation and Development concluded in its report. The organization includes European countries, the United States, Canada, Japan and Australia.

Still, Willy de Greef, secretary general of EuropaBio, a biotechnology industry group, said the world possessed the land and agricultural ability to produce enough food and fuel through subsidy programs.

“Of course these policies have to be developed with high quality sustainability criteria,” he said. But he added that that should include consideration of the fact that biofuels could help reduce poverty. “The development of biofuels will in fact create new revenue options for farmers all over the world, including poor farmers,” he said.

In the past eight years, as oil prices and concerns about carbon emissions have increased, a number of countries, including the United States, and the European Union have put into place subsidies and incentives to energize the fledgling biofuel industry.

As a result, the production of biofuels made from crops that could also be used for food increased more than threefold from 2000 to 2007, the Food and Agriculture Organization said. Support to encourage biofuel production in Organization for Economic Cooperation and Development countries amounted to more than $10 billion in 2006, the organization said.

But a host of studies in the past year concluded that the rush to biofuels had some disastrous, if unintended, consequences for food security and the environment. Less food is available to eat in poor countries, global grain prices have skyrocketed and precious forests have been lost as farmers have created fields to join the biofuel boom, the studies said.

Worse still, specialists say, so much energy is required to convert many plants into fuel that the process does not result in a savings of carbon emissions. The O.E.C.D.’s report said only two food-based fuels were clearly environmentally better than fossil fuels when considering the entire “life cycle” of their production: used cooking oil and sugar cane from Brazil. Sugar cane is far easier to convert to biofuel than most other crops.

Already this year, the European Union has stepped back from its target of having 10 percent of Europe’s fuel for transportation come from biofuel or other renewable fuels by 2020.

Last month, the European Parliament suggested that only 5 percent come from renewable sources by 2015, and that 20 percent come from new alternatives “that do not compete with food production.”

Mr. Diouf of the Food and Agriculture Organization stopped short on Tuesday of suggesting that the world end biofuel subsidies. Rather, he said they should be revised to direct the benefits to developing nations.

By Tom Barkley
Of DOW JONES NEWSWIRES

WASHINGTON (Dow Jones)–The head of the International Monetary Fund urged
global leaders Wednesday to not forget about developing countries still
struggling with high food and fuel prices, an ongoing problem that threatens to
be overshadowed by the latest blowup in financial markets.

“We can’t lose sight of the other crisis,” IMF Managing Director Dominique
Strauss-Kahn said during a conference on the impact of the commodity price
boom, saying it has the most direct impact on less-developed countries.

While the price of oil and many grains peaked over the summer, they still
remain above year-ago levels and are causing inflation and balance-of-payment
problems in developing and emerging economies, he said.

“The situation is probably a better than it was a few months ago, but it’s
still a very, very difficult situation,” said Strauss-Kahn.

He said the international community’s response in providing assistance has
been “disappointing,” saying donors haven’t provided a “large part” of the aid
they had promised.

The two main priorities will be to help countries bring inflation under
control and to convince governments to adopt more targeted subsidies and other
safety-net programs, he said.

-By Tom Barkley, Dow Jones Newswires; 202-862-9275; tom.barkley@dowjones.com

For Ford Heights and other agricultural towns, the “green- collar” job revolution envisioned by federal biofuel mandates is a dream deferred. Knee-high grass and old tires cover the site as record prices for corn, the main ingredient in ethanol, discourage investment in new plants.

The $20.8 billion industry may have itself to blame. Breakneck construction led to 168 ethanol plants, already producing more than U.S. mandates require for the fuel additive this year. The distilleries buy so much corn — as much as a third of the U.S. crop this year — that they have contributed to price increases, the U.S. Department of Agriculture says.

“I kept saying they’re going to kill the golden goose,” says Jim Jordan, president of Jim Jordan & Associates LP, a Houston fuel-consulting company. “We have in fact overbuilt. This thing is pretty devastating.”

U.S. President George W. Bush and Democratic presidential candidate Barack Obama, a senator from Illinois, have backed ethanol as a way to support American farmers and reduce dependence on imported oil. It’s distilled from corn kernels in the U.S. and blended into gasoline. One corn bushel yields 2.75 gallons of ethanol.

Food Inflation

Initial enthusiasm has given way to concern that diverting crops for fuel is accelerating a rise in food costs. Riots have erupted over shortages from Haiti to Egypt.

Some U.S. food companies, including Springdale, Arkansas- based chicken producer Tyson Foods Inc., formed a “Food Before Fuel” coalition in June to oppose ethanol mandates. John McCain, the Republican presidential nominee and Arizona senator, has “traditionally been opposed to ethanol subsidies that distort the market,” says Tucker Bounds, a spokesman.

Ethanol may account for 20 percent of the gain in the rate of U.S. food inflation, says Ephraim Leibtag, a USDA economist. U.S. food prices may climb 6 percent this year, the most since 1980, the department estimates.

The overcapacity prevents lenders from financing ethanol plants that distill ethanol from corn kernels, says Mike Tian, an analyst at Morningstar Inc. in Chicago.

“A lot of these towns that hoped to get an ethanol plant probably aren’t,” he says.
Ford Heights Mayor Saul Beck says he was ecstatic in 2006 about having a distillery in his town of 3,300, where the U.S. Census found that 49 percent of residents live in poverty.

At least three ethanol producers went public that year, including Aventine Renewable Energy Holdings Inc., VeraSun Energy Corp. and Green Plains Renewable Energy Inc. in Omaha, Nebraska. At one point, the American Coalition for Ethanol tracked 500 planned plants, says Ron Lamberty, a vice president at the Sioux Falls, South Dakota, trade group.

Falling Margins

When Ford Heights Ethanol applied for a permit for its proposed $130 million plant, producers pocketed an average of $2.64 on every gallon made. By Sept. 10, rising corn prices reduced that margin to 57 cents, Bloomberg data show. Corn has risen 58 percent in the past year, to $5.3675 a bushel.

“This is a major bump in the road,” says Walker Filbert, president of Heartland Ethanol LLC in Knoxville, Tennessee, which abandoned plans to build seven plants in Illinois.

In Ford Heights, charred remains of homes pepper the plant site’s neighborhood.
“It would have brought some jobs,” says Beck, 71. “They got the permit and we haven’t heard anything else.”

Lenders balked at funding the project, says Jonathan Kahn, president of Ford Heights Ethanol: “One of our biggest regrets is that we couldn’t get manufacturing in a community that so desperately needs it.”

On Hold

Across Illinois, 795 million gallons of ethanol are on hold, Chicago-based investment
firm William Blair & Co. estimates. That’s slowed construction and growth in permanent ethanol-related jobs, says Tom Hauser, vice president of CoBank, an Omaha-based lender to ethanol companies. Each plant employs about 50 people, who earn $40,000 a year on average, he says.

Producers’ shares were battered. Aventine, based in Pekin, Illinois, fell 88 percent
from June 2006 through Sept. 10. VeraSun of Brookings, South Dakota, dropped 78 percent; and Green Plains declined 82 percent.

The 168 plants had capacity for 9.96 billion gallons as of Aug. 26, almost 1 billion
more than the U.S. requires this year, the Washington trade group Renewable Fuels Association says. Another 43 plants scheduled to be built or expanded would raise capacity to 13.8 billion gallons. Most make ethanol from corn.

Alternate Sources

Even established corn-ethanol producers put more emphasis on making “cellulosic”
ethanol from alternate sources such as wood chips. The still-imperfect process doesn’t promise immediate benefits for towns with nearby corn growers.
Poet LLC, which is based in Sioux Falls and is the largest U.S. ethanol producer, said in August it will open a $4 million South Dakota plant to produce ethanol from corn cobs by year- end. The capacity will be 20,000 gallons.

Asked whether Obama may reduce his support for corn-based ethanol as president,
spokesman Tommy Vietor referred to an April speech in Indiana:
“We have to recognize that corn-based ethanol is a transitional technology,” the candidate said then.

With the dollar a day he earns scrounging for scrap metal and paper, Jumadi can’t buy his family beef or even chicken. But until now, the rail-thin scavenger could at least afford soy.

His wife and two children snacked on slabs of fried fermented soy, known as tempeh, and tossed the cake-like staple into bland bowls of noodles and soup. The soy provided protein, and it was cheap.

Not any more. The cost of tempeh and tofu has doubled to record highs, driven by the soaring price of soybeans imported from the United States.

“What kind of life is this?” complained the 25-year-old, who like many Indonesians goes by only one name, as he stood outside his plywood shack that was buzzing with flies. “I just eat crackers now.”

The cost of soy is spreading hunger on the country’s main island of Java, where millions of poor and working-class families depend on tofu and tempeh every day. It is also devastating an entire local industry based on soy products. Hundreds of factories have closed, thousands of people have taken to the streets to protest soy prices and at least one soy vendor killed himself after falling into debt.

The lessons of the soy crunch, however, go far beyond Indonesia.

Over the past decade, Indonesia went from growing more than half its soy to relying on the U.S. for 70 percent of it. Now the poor among this country’s 220 million people are going hungry because of changes thousands of miles beyond their shores. It is the same story for dozens of countries that came to depend on richer nations for cheap food, only to find themselves squeezed when prices start rising last year.

“There has been a drastic change in prices and these smaller countries have little to say. They basically have to take it,” said Abdolreza Abbassian, a grain economist with the FAO. “They were exposed to the negative sides of globalization, rather than the positive.”

Soy has long been a staple in Indonesia. But in the 1990s, farmers complained that it was too expensive to grow because the government did not provide cheap seed or low-interest loans. At the same time, they could not compete with cheaper, better soy from countries like the United States, where farmers had advanced technology and government subsidies.

Ruslan, who farms 7 1/2 acres of land in Ponorogo in East Java, planted soybean for two decades. But in the late 1990s, the 50-year-old farmer began growing melons, corn, onions and chili instead.

“I got out of the soybean business because the cost of production was so high that I was not making any profit,” he said. “Since I switched to corn and melons, I’ve always had a good profit.”

Because of farmers like Ruslan, Indonesia’s soy production dropped over the past nine years from 1.4 million tons to around 700,000. The country stopped fixing prices for imported soy, and this year eliminated import tariffs on soybeans.

At first the imports worked fine. Beans were big, prices were low and people were happy.

But Indonesia was now dependent on the soy fields of the U.S. And it paid the price when the Mississippi River flooded in June, leaving thousands of acres of soybeans waterlogged. By July, soybean futures were up 82 percent over the past year, although they have come down since.

Indonesia also felt the ripples from a new demand for alternative fuels. About 20 percent of soy now goes to make biodiesel in the U.S., up from almost nothing three years ago, the FAO said. And the demand for corn to make ethanol has prompted American farmers like Larry Gleason and Tim Henning to switch away from soy.

Gleason, his three brothers and his dad split 3,500 acres in central Illinois evenly between soy and corn until last spring. Now 70 percent goes to corn.

“It’s like any other business: You try to find where you’re going to make the most money,” Gleason said.

Because of the demand for ethanol, the U.S. expanded corn production by 23 percent in 2007, the World Bank found. At the same time, it reduced soybean fields by 16 percent.

Henning calculated last spring that corn brought $75 to $85 more profit per acre than soy. So in 2007, he planted 50 more acres of corn on his 800-acre Minnesota farm and that much less soy. At a time when costs have risen for fuel, fertilizer, machinery and land, Henning is trying to squeeze what money he can from the earth.

“A number of years ago, the farmer got blamed because corn and bean prices were too cheap and farmers overseas were going broke,” said Henning, 50. “Now, they are saying the prices are too high and people can’t afford to buy the food. So, we kind of feel we are in a damned if you do, damned if you don’t situation.”

Fuel costs are making it more expensive not just to grow soy, but also to transport it to faraway places like Indonesia by truck, rail and ship. Prices have gone up further because of a shortage of containers from the booming demand from India and China, said Mike Steenhoek, executive director of the Iowa-based Soy Transportation Coalition.

The cost of shipping soy from the Midwest to ports in the Pacific Northwest and onward to Asia has increased from $32 a metric ton two years ago to $80, according to Mark Klein, a spokesman for Minnesota-based Cargill Inc., one of four companies that import soybeans to Indonesia.

“You add it all up and to take a bean from the Dakotas/Minnesota to the Far East is now $1.90 a bushel more than two years ago,” Klein said. “That tells part of the story.”

The story of the soybean ends back in Indonesia, in cities like Bandung, famous for its tempeh and tofu industry.

Streets in this West Java city are lined with shops selling crispy tempeh crackers and vendors with small carts offering meatball soup with tofu to passing motorists. Hundreds of mom-and-pop operations make tofu and tempeh, Young men fry soy in vats of oil or ferment the pea-size beans in wicker baskets.

With slim profit and no cash on hand, few were prepared when soy prices started rising steadily in August 2007. Since then, soybean prices have jumped 50 percent to a record high - or about twice the rates in 2004.

The price of kerosene and cooking oil rose at the same time. Almost 300 producers in Bandung shut their doors this year.

“If the price keeps going up, maybe the tofu and tempeh industry will disappear,” said H. Akil Dermawi, who heads Bandung’s tempeh and tofu cooperative. “We know the global economic situation doesn’t support micro businesses like tofu and tempeh makers.”

One such maker is Syahroni, who came to the West Java town a poor farmer. Over the past decade, he built a successful business selling tempeh to 150 vendors in the city and converted a ground floor room in his Bandung house into a factory.

But since January, he has had to raise his prices 25 percent to cover rising costs, and has reduced the size of his tempeh portions. He promptly lost a third of his customers and profits fell by half.

“In the past, this was profitable. You can see I bought a house,” said the 34-year-old father of two. “But now, it’s difficult to even buy food for my children. Last year, I could go on a holiday. Now, I can’t go anywhere.”

Slamet, a street vendor who sold cubes of deep-fried tofu from a cart in the village of Cidemang a few hours outside Jakarta, fared even worse.

For nine years, he worked the town’s main street. He brought in a few dollars a day, enough to feed his two children and afford a simple two-room house near the main market.

But as prices peaked in January, he fell 2 million rupiah ($220) in debt, became depressed and stopped eating. His wife came home Jan. 14 to find him hanging by a rope in one of the family’s two bedrooms. He was 45.

“He couldn’t take the higher prices,” said his wife Nuriah, breaking down in tears inside the family’s house. “He said there was no point in selling. Now, there is no one to bring in money.”

The day he killed himself, thousands of people converged on the capital, Jakarta, to demand that the government provide relief from rising soy prices. The demonstrations sent a chill through a government that still remembers how protests over food prices sparked the overthrow of the Suharto regime more than a decade ago.

The government responded by providing subsidized cooking oil and rice to 19 million households and offering subsidized soybeans to more than 100,000 small tofu and tempeh producers. It also launched a plan to spend more on agriculture and offer incentives like cheap fertilizer, but Indonesia will not be able to meet its own demand for soy until at least 2015.

There is now talk of giving the state the power to set the price for imported soybeans, which worries Ali Basry, the American Soybean Association’s country representative. Basry said the rising prices are simply a reflection of market forces.

“Suddenly, the government is trying to calm the situation by putting a subsidy on the bean price,” he said. “I don’t know.”

But tofu and tempeh producers want fixed prices and accuse importers of profiting from the volatility. They are convinced the problem remains the country’s dependence on imports.

“My customers get angry because the pieces of tofu are smaller,” said Sukarndar, a 38-year-old vendor in Jakarta, who buys freshly baked brown tofu daily at a neighborhood factory and resells it for a few cents at a nearby market.

“I tell them the soybeans come from America,” he said, his voice rising in anger. “It is not our fault. I’m being oppressed because of prices in the United States.”

___

Associated Press reporter Irwan Firdaus in Jakarta and Jim Suhr in St. Louis contributed to this report.

Copyright 2008 Penton Business Media, Inc.
Byline: Matthew Enis
August 25, 2008

Sen. Ben Nelson, D-Neb., went on the defensive during last week’s Senate committee hearing organized to address the food-vs.-fuel debate over corn and ethanol.

“Corn-based ethanol is not perfect, but it’s been blamed for practically every problem under the sun,” Nelson said. “What’s next? Summer colds? Computer viruses? Bad hair days?”

To some extent, Nelson is right. Several factors are responsible for driving the price of corn futures from less than $2 per bushel in 2005 to a recent peak of almost $8 per bushel in June. Growing meat and dairy consumption in the developing world has caused the demand for animal feed to rise, even as droughts in several countries have tightened global grain supplies. With stock markets sinking and currency markets looking shaky, many non-commercial speculators have jumped into the commodities markets, raising futures prices and creating more volatility.

But whatever it is that’s causing corn prices to skyrocket, meat and poultry producers - as well as food industry groups, including the Grocery Manufacturers of America - won’t find Nelson’s quip the slightest bit amusing. Higher corn prices have been a boon to many of Nelson’s constituents, but have stung other farmers and have contributed to food price inflation.

Meanwhile, ethanol producers and row-crop growers have banded together in public relations efforts, hoping to deflect the blame. Lately, they’re trying to paint food suppliers as hypocrites.

“Blaming biofuels for high food prices is a great trick for these large food corporations. They get to raise their prices, increase their profits and not worry about how it affects American families struggling to make ends meet,” Brooke Coleman, a spokesperson for FoodPriceTruth.org, said in a release last week.

If there’s a way to stabilize and lower corn prices, something needs to be done. If there’s an efficient way to reduce America’s dependence on foreign oil by making fuel from plants, something needs to be done. FoodPriceTruth.org isn’t helping to achieve either goal when it characterizes the ethanol debate as a “smear campaign” against the biofuels industry. This only muddies the waters and confuses consumers. It is obvious to anyone who has watched this issue unfold that federal ethanol mandates have caused demand for corn to mushroom during the past three years. With rising demand comes rising prices.

There’s no “smear campaign” here, and this issue is too important to drag down to the level of name-calling stupidity now masquerading as public debate in America.

Fortunately, the price of corn has eased off of record highs. Reports of a bumper crop in the Midwest helped lead futures prices down to recent lows around $5. Unfortunately, non-commercial speculators are apparently still aggressively playing the market. Any unfavorable news about the U.S. dollar lately leads to another spike in corn prices. Last week, corn was up to $6.20 again.

High, volatile prices for corn are a problem. Without an honest debate, we can’t work toward a future where renewable fuels are the norm and the prices for other necessities are still reasonable.