Here is a new story about Unilever opposing biofuels.

We’ve said it time and again, oil prices are what is driving commodity costs — not biofuels.  In fact, biofuels keep gasoline prices down.

Nestle Chairman Peter Brabeck-Letmathe says that rising oil prices force farmers to grow more corn for biofuels, which raises commodity prices. But he won’t admit that rising oil prices are responsible for making nearly every other aspect of producing food products more expensive.  The Chairman said:

“Most important, of course, is the oil price, because through oil you have an impact” on agricultural producers,” Brabeck said.

Too bad food companies won’t be honest with Americans about why their food costs more. Rising oil prices, not biofuels.

Click here to read the story.

FoodPriceTruth.org has been questioning the real reason for food price increases.  Well, it seems the Justice Dept. is too!

Here is a Reuters article claiming: U.S. soy, corn fall on weak oil, investors uncertain

Corn and soy prices track with oil, because oil prices impact nearly every aspect of farming, transporting and selling those commodities.  Wall Street gets it, because on Wall Street understanding how the markets work means either making, or losing money.

For ethanol’s opponents at the World Bank and various “environmental” groups, bashing ethanol is done for sport where there are no consequences for being wrong. Well, except that if they are successful, we will lose an industry that offers the only viable alternative to oil.

We all know that food companies continue to make hefty profits by raising their prices to outpace commodity costs, but here are some good examples of shrinking food serving sizes:

• While the Skippy jar remains the same height and diameter as it did when it contained a full 18 ounces of peanut butter, a deeper indentation on the bottom accounts for the loss of 1.7 ounces.
• A box of Kellogg’s Apple Jacks, down from 11 to 8.7 oz.;
• A can of Starkist tuna, shrunk from 6 to 5 oz.;
• A bottle of Tropicana orange juice, which sports a new snap cap that’s supposed to make up for the fact that you’re getting 7 oz. less liquid; and
• A “half-gallon” container of Breyers Ice Cream, which now holds 48 oz. instead of 64.

Thanks to Wallet Pop for fidning this.

According to this Reuters story out of the UK, commodity prices are down for wheat, barley, butter and skim milk, but food prices remain high.

This is an interesting story from San Joaquin County, CA, about school lunch prices going through the roof.

Just as high schoolers learn in economics class, there is no such thing as a free lunch. Skyrocketing corn, wheat and gas prices are forcing school districts to either absorb the increasing food prices or charge families extra for the meals they buy.

Corn, wheat and even gas prices keep coming down. So when will the food companies lower their prices?

EnergyWashington Week (subscription site) is reporting that:

A State Department advisory panel soon will discuss the formation of a food-crisis “brain trust,” which would assemble an unprecedented array of America’s top universities and individual experts as a policy force on agricultural issues, including agricultural-energy and biofuels policies. Informed sources say a draft white paper describing the proposal, under strict orders not to be discussed, may pave the way for a new public-private strategy on “food-versus-fuel” policymaking and direct the course of U.S. biofuels policy in the next administration.

The white paper is scheduled for a Sept. 9 review by the Board for International Food and Agricultural Development (BIFAD), an advisory group to the State Department. Sources say the recommendation could set the stage for much wider discussions in the next administration, including private sector collaboration in addressing biofuel concerns.

Today, the AP is reporting that wholesale prices in July were:

pushed higher by rising costs for energy, motor vehicles, and other products. The increase was more than twice the 0.5 percent gain that economists expected.

That’s right, energy prices push up the costs of everything, including food.

This brilliant article discusses the contradictions and inefficiencies in agriculatural policies that lead to increased food prices.  My favorite part:

An example, a recent study looking at Nicaraguan coffee production and processing showed that the total energy embodied in coffee exported to several countries - though not all - was not compensated by the dollar price paid for that energy.

Essentially, the conclusion was that the country is exporting subsidised energy.

The Nicaraguan government would be better off giving the farmers money instead of subsidizing coffee.