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Ethanol Blamed For Food Price Hikes

Ethanol Blamed For Food Price Hikes

NY Times
December 19, 2007

Shopping at a Whole Foods Market in suburban Chicago, Meredith Estes said food prices have jumped so much she has resorted to coupons. Charles T. Rodgers Jr., an Arkansas cattle rancher, said normal feed rations so expensive and scarce he is scrambling for alternatives. In Oregon, Jack Joyce, the owner of Rogue Ales, said the cost of barley malt has soared 88 percent this year.

For years, cheap food and feed were taken for granted in the United States.

But now the price of some foods is rising sharply, and from the corridors of Washington to the aisles of neighborhood supermarkets, a blame alert is under way.

Among the favorite targets is ethanol, especially for food manufacturers and livestock farmers who seethe at government mandates for ethanol production. The ethanol boom, they contend, is raising corn prices, driving up the cost of producing dairy products and meat, and causing farmers to plant so much corn as to crowd out other crops.

The results are working their way through the marketplace, in this view, with overall consumer grocery costs up roughly 5 percent in a year and feed costs up more than 20 percent.

Now, with Congress poised to adopt a new mandate that would double the volume of ethanol made from corn, ethanol skeptics say a fateful moment has arrived, with the nation about to commit itself to decades of competition between food and fuel for the use of agricultural land.

“This is like a runaway freight train,” said Scott Faber, a lobbyist for the Grocery Manufacturers Association, who complained that ethanol has the same “magical effect” on politicians as the tooth fairy and Santa Claus have on children. “It’s great news for corn farmers, but terrible news for consumers.”

But ethanol critics are not getting much traction with their argument. Last week, the Senate voted 86 to 8 for a new energy bill containing expanded ethanol mandates, and the House is expected to follow suit this week.

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