In case you didn’t hear the news, FoodPriceTruth.org had a BBQ on Capitol Hill last Thursday night and it was quite the success.  More than 700 people, including nearly 500 Hill staffers and several members of Congress, came to the Rayburn Building Courtyard to learn the truth about food prices.

At the event, everyone was given a menu with information about how much oil is to blame for the price increases of each of the foods they were eating, the beer they were drinking, and even the silverwear they were using as cutlery.

Some fun pictures from the BBQ here.

I reviewed Dr. Collins’ “study” and was really disappointed to see such a great ag economist be on the “paid ticket” of groups with agendas who have asked him to develop numbers to support their cause. Initially, he outlines many factors affecting food prices and feed prices…

“Many factors are contributing to higher farm-level and retail food prices. They include: (1) strong global economic growth, thereby increasing demand for U.S. commodities; (2) the declining value of the dollar, although recent real trade-weighted exchange rates suggest that the weakened dollar has been less important to corn and other key crops; (3) reduced supplies of some crops, such as wheat and rice, due to adverse global weather; (4) higher energy prices that have increased farm production costs and food processing and distribution costs; (5) changing foreign agricultural policies that insulate countries from higher global prices; (6) increased investment by index funds and other managed investments that probably have increased price volatility but are not likely to have sustained effects; and (7) biofuels, particularly corn-based ethanol.”

But then focuses solely on biofuels and makes the huge leap in assumption as noted in this quote from the article:

“For example, assume, as this paper suggests, that 60 percent (or $20 billion) of the expected increase in feed grain and oilseed product costs between 2006/07 and 2008/09 is accounted for by biofuels. These increases, in turn, translate into increased U.S. personal consumption expenditures on food, over a 2-3 year period, of 1.8 percent. While 1.8 percent may, on its face, appear small, it must be viewed in the context of the long-term annual average increase in food prices of about 2.5 percent per year. Thus, the increase in retail food prices due to biofuels is estimated to be 23-35 percent above the normal increase in food prices that would occur over 2-3 years. Accordingly, biofuels is now becoming a significant factor in higher food prices.”

As I’ve argued for a long time, assumptions in these studies determine the outcomes. When such a great ag economist goes looking for facts to support pre-conceived assumptions to support conclusions for a cause, ignoring the larger driving factors affecting world and domestic food and feed prices (which he identified) it’s a pretty sad day. Undermines the entire credibility of the report for me, but many will accept the results based on who he is (was) as the economist for USDA for many years.

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A report by KOLN of Lincoln, Nebraska, reminds us that biofuels are in their infancy, and that technological leaps are fast making ethanol even more preferable to fossil fuels. KOLN reports:

Monday, ICM Incorporated will introduce its advanced food and fuel technology — a “dry corn fractionation” process that allows the use of the entire corn kernel. The plan calls for the construction of separate facilities at ethanol plants where the dry corn kernel can be separated into its components before it is contaminated in the later ethanol distillation process

This is exciting new technology. I hope it reminds ethanol’s critics that any attempts to roll back biofuels production will stifle ingenuity like this. And that means our reliance on fossil fuels will continue even longer.

The Truman National Security Project, a highly-respected organization (by both Democrats and Republicans) in Washington dedicated to protecting our national interests released a Backgrounder: “Food Fights and Rising Prices: Renewing Our Fuel Standards and Our National Security.” The Backgrounder begins:

Energy independence is essential for our national security, but recent food riots have shaken many peoples’ belief in biofuels. As unrest spreads and grocery prices grow, conservatives are starting to exploit this uncertainty by mounting a rollback campaign against renewable energy. They are pushing Congress to amend the recently passed Renewable Fuel Standards provision, which promotes alternative energy, while endorsing expanded oil drilling in the Alaska National Wildlife Refuge. This would be a grave mistake. Not only is ending our oil addiction crucial to our national security, but our oil dependence is a key cause of skyrocketing food prices. Continuing our reliance on oil will only heighten the price spike.

The Backgrounders are widely distributed on Capitol Hill, to both House and Senate Members and their staffs.

The Wrightstown Post Gazette, a newspaper in Wisconsin, published an editorial today saying that:

we shouldn’t abandon corn ethanol, but rather use it as a bridge as we continue to look into other alternative forms of energy, including cellulosic ethanol production from feedstocks, such as wood chips, switchgrass and even garbage.

We couldn’t agree more with the Post Gazette. Abandoning corn ethanol would mean forsaking second generation biofuels which would not compete with food stocks and would help curtail global warming.

An op-ed in the Seacoastonline calls on the President to immediately end the ethanol mandate. The author, Thomas Akin, states:

If President Bush had any shred of intestinal fortitude, he would issue executive orders ending the ethanol disaster and one to instruct the Energy Department to issue the building permits that have been denied the power industry for over 20 years, and one to order drilling for oil in the United States.

First, Akin gets it wrong because building more nuclear power plants will in no way help us power our automobiles. Second, tapping any additional oil sources in the United States wouldn’t provide any new oil for nearly a decade.

Can we really afford to do nothing to abate our dependence on oil until a few new sources for oil come online in ten years? Biofuels provide some hope and the ethanol mandate means we can get to the second-generation biofuels sooner rather than later.

Some in Congress are seeking an investigation into whether oil companies are manipulating their prices – forcing everyone to pay more for everything from gas prices to food. The investigation is being done by the Commodity Futures Trading Commission.

Maybe someone should look into whether the oil companies are behind the effort to blame ethanol for high food prices? You know, like the food companies.