DON’T BLAME ETHANOL FOR FOOD PRICES - USDA’S CONNER
10.2.07 - Leído 118 veces. Enviar esta notaThe growing use of corn to produce ethanol is not chiefly to blame for rising US food prices, the top federal farm official said
WASHINGTON, US; October 2, 2007.- “When we break down what is happening with food prices, we do see a complex set of factors at work. It’s not quite a simple equation of rising ethanol demand equals higher food prices,” acting Agriculture Secretary Chuck Conner said at a food policy conference.
For the Bush administration, increasing renewable energy supplies is a major policy goal.
Currently, there are 129 ethanol plants operating nationally, Conner said. Capacity is now around 6.8 billion gallons annually, and is expected to explode in the next few years.
While many farmers have shifted acres into corn to help feed that production, ethanol demand is still expected to eat a quarter of this year’s crop.
Many see ethanol behind a surge in food prices, which were 3.6 percent higher through August than they were in the same 2006 period, above the average 2.7 percent food inflation over the past three years.
The US Agriculture Department expects food prices to increase by up to 4.5 percent this year.
“Clearly, ethanol demand is having an impact. We cannot deny that,” Conner said.
But he believes the ethanol-inflation link has been overstated, and suggested that inflation rate would return to between 3 percent and 4 percent next year.
Feed prices, however, are up 22 percent, which Conner suggested could ultimately hit consumers at the supermarket, with the biggest increases in milk and other dairy prices.
“Higher corn prices are not the only, or even, I would argue, perhaps the most important, factor in higher prices of certain retail food items.”
A more important cause, he said, were soaring prices for oil, which feeds into not only processing but transport and even packaging. Adverse weather is another factor, he said.
(Reuters)
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