St. Louis, Missouri
August 8, 2007
A trio of new studies is
shattering the myths about the relationship between the price of
corn, ethanol production and food prices. The
National Corn Growers Association
(NCGA) sees the studies as proof that agriculture can continue
to meet the nation’s growing demand for both food and fuel.
Taken together, the reports, from the Center for Agricultural
and Rural Development (CARD) at Iowa State University, the
Consumer Federation of America (CFA) and Houston Biofuels
Consultants LLC, show that higher corn prices have little effect
on either food or fuel prices.
NCGA did not participate in or provide funding for any of the
studies.
“The CARD report repeats the conclusions it had reached in its
study earlier this year,” said NCGA Vice President of Public
Policy Jon Doggett. “However, some people misinterpreted that
study’s findings, because it included a ‘worst-case scenario.’
This report is very clear – a 30 percent increase in corn prices
would increase consumer food prices by only about 1.1 percent.”
The CFA study includes a stinging criticism of the oil industry
for failing to use ethanol as a way to increase supplies of
refined gasoline. The study notes increased use of ethanol could
actually help reduce food price increases. “High energy prices
cause higher food prices,” says CFA director of research Marc
Cooper. “(T)he historic corn-crude price relationship will
cushion the impact that ethanol production has on food prices.”
The report also said, “Based on the historical relationship
between crude [oil] prices and corn prices, current prices for
corn are lower than one would predict,”.
Houston Biofuels Consultants comes to much the same conclusion.
“Historically, ethanol prices haven’t tracked corn prices,” it
notes in the July issue of Ethanol Producer Magazine.
- Click
here to read the CARD report.
- Click
here to read the Consumers Federation of America Report.
- Click
here to read the Houston Biofuels study in Ethanol Producer
Magazine. |
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