Organizations Review CBO Report

Officials from several agricultural organizations have thoroughly studied a report released last week by the Congressional Budget Office. That report proved that higher energy costs have a greater effect on food prices than the use of renewable ethanol fuel. AFBF President Bob Stallman said the report came as no surprise. He said there are numerous factors responsible for higher food prices, including labor expenses, energy costs, financial speculation, increased demand, weather production losses and the weak U.S. dollar.

National Corn Growers Association CEO Rick Tolman pointed out that - opponents of biofuels promote a simplistic message that taking more from the pie for ethanol leaves less for food and feed. Tolman says - the reality is that the pie is getting bigger and more can go for ethanol without taking away corn from food and feed. It is not a zero-sum game.

According to the Agriculture Department, farmers receive less than two dimes out of every dollar spent for food in the United States. Eighty percent of the costs of food, including processing, transportation, packaging, distribution and retailing are all added after the commodity leaves the farm.

The CBO report states that increased ethanol production caused a mere 0.5 and 0.8 percentage point increase in the price of food between April 2007 and April 2008. National Farmers Union President Roger Johnson said NFU is - again calling for Congress to reconvene hearings to investigate higher retail food prices; while commodity prices have tanked since last summer's peak, grocery store prices remain high.