Finding the solutions to feed, fuel the world

By Don Hutchens, editorial in Feedstuffs, March 7, 2011

In a recent viewpoint (Feedstuffs, Jan. 31), Dennis Avery said: “The U.S. in fact, could ease the current global food price spike with one administrative action: limiting the amount of domestic corn that gets turned into ethanol.” For someone who seems to be so worldly and knowledgeable, Mr. Avery is naive and simplistic to think that the world food solution could be so easy.

He also goes on to say, “America’s huge corn crop is diverted from food and feed into an ultra-costly auto fuel that gives consumers poorer mileage even as it drives up their food costs.” Obviously Mr. Avery has not purchased any $3.49 gasoline of late. I have been enjoying filling my flex fuel Chevy Avalanche with E85 (85 percent ethanol) for $2.69 (I lose 2 miles to the gallon uses the E-85). Along with the cost savings, I relish the fact the 13 billion gallons of ethanol produced in 2010 displaced the gasoline refined from 445 million barrels of crude oil. This reduction in oil imports saved the U.S. economy $34 billion dollars.

Of course the oil industry does not live on bread alone considering the tax breaks, oil depletion allowances, incentives, etc., that come to, on average, about $20 billion worth of subsidies.

Between the Grocery Manufacturers Association and the oil lobby, corn ethanol has been a steady and consistent target.

However, events of the last few weeks in the Middle East should also serve as a wake-up call to those who seem to find joy in bashing corn and ethanol. It’s not the fundamentals in the markets that sent crude soaring to $100 per barrel – but just the thought of a disruption. Now that will impact food prices and just about everything else just as it did in 2007-08.

It’s also important to remember that the U.S. ethanol industry utilizes just 3 percent of the global grain supply – and returns millions of tons of distillers grains in the process, the prices of which are reported in the back of every edition of Feedstuffs and, according to my estimation, provide a very good feeding value.

Back to world hunger and food prices. Yes there may be in an increase in food prices for many different reasons over the next year. Everything from weather to population growth (206,000 more people per day), market speculators and political conflicts around the world just to name a few.

U.S. farmers and livestock producers strive to answer that challenge by producing more on fewer acres, using less water, reducing erosion and using less energy – some of the very high-yield farming Mr. Avery himself promotes frequently. However, farmers aren’t the only ones being more efficient. The cattle and hog industries are doing the same, and even ethanol producers are using less energy and less water while producing more ethanol from the same number of bushels.

Avery attributed food riots and a 50 percent increase in food prices in 2008 to…yes, you guessed, it corn/ethanol.

There is an arm long list of publications that took a serious look at this issue and clearly refute those claims and instead lay a majority of the credit where it belongs: high energy (oil) costs.

Let’s step back and take a look at what more profits in agriculture and a challenge to produce more, brings to the table. I bet it brings more meat, more grain, more fiber and even more renewable energy.

GMA and AMI: Astroturffed fools

The Grocery Manufacturers Association and American Meat Institute – and their merry band of partners collectively known as the Grocery Gang -- are back. Yet this time in their newspaper ads and radio interviews they look even more foolish then before.

Why?

Because when they started the incredibly false (astroturf) food/fuel debate 18 months ago they at least had rising corn prices to point to in support up their argument. Now, though, corn prices less than half they were at the highs last year. In fact, cash corn is below $3 in many places. Yet ethanol production is way up. Hmmm.

Apparently the drop in corn prices hasn’t made it’s way to AMI spokesman Dave Ray, who was quoted in Brownfield complaining that ethanol has led to “double or triple” price increases in corn. If he’s buying corn today at $6 or $9, I know a few farmers who are selling.

Ray also foolishly tries to put a wedge between livestock producers and corn farmers -- as if one is better or more important than the other. The truth is, both are vital and both need each other to succeed. In fact, cattle producers and ranchers and corn farmers agree on a lot more issues than they may disagree on -- with a basic premise is both need to be profitable over the long haul.

The Grocery Gang also completely ignores another important product produced by ethanol plants -- that being distillers grains. While you often hear that one-third of a bushel of corn that goes through an ethanol plant comes back as distillers grains, it’s value is actually much more than that.

Distillers grains helps cattle producers and others in the livestock sector to reduce costs and improve performance. (Check out this post on some calculations showing profit opportunities thanks to distillers grains.)

But worst of all, the Grocery Gang’s shooting off at the mouth by falsely claiming corn ethanol is bad for the environment my put themselves in the spot light answering questions about their own environmental performance.

Specifically, of course, is the Gang’s charge that increasing the ethanol blend rate will “destroy millions of acres of forests.” While not naming Brazil, that is exactly what they are talking about – that corn ethanol will lead to the rain forest being stripped.

Yet, by far, the biggest contributor to deforestation is illegal harvesting of wood and cattle production. Yes – beef – the very product AMI and the Gang promote.

The Gang also makes an argument on greenhouse gas emissions. But perhaps some looking in the mirror would be good here. The last thing anyone needs is for livestock production to get hit over the head with tough greenhouse gas rules. Yet if they argue that corn and ethanol have a significant impact on greenhouse gases all the people they are trying to rile up will look at them, too.

In fact, many of the anti-corn ethanol folks are also anti-big meat. Connecting dots really isn’t all that difficult. Why stir the pot with myths and lies?

Grocery Gang's efforts don't change the facts

A couple of weeks ago - at the same time an ethanol/renewable fuels hearing on Capitol Hill was going on - the Grocery Manufacturers Association and its surrogates attempted to get their names in the news by releasing a couple of "studies" about food costs, corn and ethanol.

"Studies" is in quotes because to call them an actual study is a stretch. A big stretch.

Rick Tolman, CEO of the National Corn Growers Association, put it this way: It was an attempt by GMA to keep its "comedy of errors on the media stage" with "a pair of non-peer-reviewed works of fiction that they dare to call studies. Both are done by members of what should be called the Cheap Corn Coalition."

You can find Tolman's "Our View" column here.

With GMA continuing to spend significant amounts of money trying to blame corn and ethanol on food prices (a diversion, perhaps, from its members good fortunes and profits?), Tolman wonders...

At this rate, it’s not hard to project corn and ethanol’s detractors will soon spend more on propaganda to bash the nation’s most important crop than consumers are paying in increased costs at their local market. Not a very constructive investment, unless their ultimate goals is to trounce corn prices back to the stone age and drive family farmers out of business.

The truth is, GMA and its assorted partners have been proven wrong time and again, and as the American Coalition for Ethanol put it, food processor margins have more to do with retail food prices than ethanol, corn, market speculation or even rising oil prices.

The Grocery Gang's argument has been full of holes since it threw the first volley in a very poorly organized press event a little more than a year ago.

For a couple of holes in the Gang's arguement, check out this post. (But there are more holes...Like this hole or this hole or this hole or this hole or this hole or this hole or this hole or this hole or this hole or this hole or this hole.)

Flashback to 1909 for perspective on anti-ethanol news conference

DTN's Chris Clayton has a great blog post - find it here - that details an Environmental Working Group's news conference that begrudged biofuels, especially corn-based ethanol, and the desire to increase the ethanol blend rate up to 15 percent.

In his post, Clayton takes creative liberties and writes as if the news conference was held 100 years ago - and EWG is lambasting a newfangled invention: Henry Ford's Model T.

Along the way, he dispels a couple of myths - and points out the ridiculousness of EWG's logic.

Clayton must have remembered that EWG was and continues to be a member of the Grocery Gang, which attacked corn ethanol last year with a high dollar campaign inside the Beltway and in certain pockets across the country. (With a lot of myths, half truths and misinformation.)

Here are a couple of paragraphs from the top of the post:

Today, we go back to May 18, 1909, at a news conference held by the Environmental Working Group. The EWG, new to the lobbying scene, wants to highlight some concerns about a new mode of transportation and its research showing that the so-called "automobile" will not function in the modern world.

According to EWG research, it is impractical to attempt to displace the U.S. reliance on the horse with this new vehicle known as the Model T. EWG wants to demonstrate some of the fallacies of attempting to continue trying to mass produce these four-wheeled vehicles and the negative impacts they could have on the country's economic future.

And here's how Clayton wraps up the post - flash forwarding to 2009:

OK, I'm kind of in a nasty mood today, but if gasoline and the Model T went through the ringer a century ago like we put biofuels through right now, we'd all have mustangs, just not the kind with a 5-speed transmission.

It is well worth a read - just click on the link above.

CBO: Ethanol had minor impact on food prices

A report released today by the Congressional Budget Office (CBO) said that corn-based ethanol added between a 0.5 and 0.8 percentage points of the 5.1 percent increase in food prices in 2008. (As measured by the consumer price index. The study used figures between April 2007 to April 2008.)

In other words, if you bought $100 worth of groceries, CBO says that ethanol added between 50 and 80 cents to the cost. Yes - a mere 50 to 80 cents.

So what was responsible for the other 4.3-4.6 percentage points - the other 84-90 percent of the increase?

CBO said other factors had a larger role in food prices - particularly higher energy costs (remember oil at $140 and gas at $4/gallon?).

Corn growers and ethanol companies had said all along that oil/energy had a much bigger impact on food prices than did corn ethanol. And that there was plenty of corn to go around.

The Grocery Manufacturers Association - the Grocery Gang - however, blamed corn and ethanol behind price hikes - at the same time most of its members were raking in outstanding profits.

Here's a comment from DTN's Chris Clayton (from his blog): I'm shocked that this wasn't on the front of the New York Times today. And I'm waiting for the Grocery Manufacturers Association to issue a news release saying "Our bad."

CBO also provided a bit of info on the environmental impact of ethanol - citing Argonne National Laboratory that the production, distribution and consumption of ethanol creates about 20 percent fewer greenhouse gas emissions than the equivalent processes for gasoline. That means a reduction of about 14 million metric tons of carbon dioxide and equivalent gases in 2008.

As Clayton concluded: In other words, the CBO basically stated in its report Wednesday that the impact of ethanol on food prices has been over-inflated by critics using ethanol is better for the environment than gasoline.

For the full CBO report, click here (.pdf).

Chicken's biggest problem was too much chicken

Tom Hensley, president of Fieldale Farms, a large Georgia-based chicken company, displayed some math earlier this year that was reported in a column in Feedstuffs early last month.

Hensley compared chicken company returns from June 2004 - "the best of times" for chicken producers - with November 2008, aka "the worst of times". Not exactly a fair comparison, but whatever. (Who wouldn't want to compare a tough year to the best of times....like the best of times could just go on forever.)

Every one of the top 25 chicken companies in the country made money in 2004. (How could they loose money? Breast meat was selling for $2.50/lb and chicken production was inline with demand. The global economy was booming.)

In November 2008, only one company made money, and only two made money for the year. Why? Well, high corn prices 'due to ethanol', is the standard (and bogus) line. Hensley did acknowledge 'excess production', too, but take a look at the details below and try to figure out how anyone could blame corn ethanol for the bulk of the chicken industry's woes in 2008.

Breast meat in June 2004: $2.50/lb.
Breast meat in Nov. 2008: $1.00/lb.
...a decline of $1.50/lb.
(breast meat in Feb. 2009 was $1.07/lb.,
26 percent below Feb. 2008)

Breast meat in storage June 2004: 20 million pounds
Breast meat in storage Nov. 2008: 35 million pounds
...over production and reduced demand

Feed/ingredient cost June 2004: 20 cents/lb.
Feed/ingredient cost Nov. 2008: 25 cents/lb.
...an increase 5 cents, or 25 percent

Average live weight cost of production June 2004: 30 cents/lb.
Average live weight cost of production Nov. 2008: 39.9 cents/lb.
...increase of 9.9 cents, or 33 percent
(birds were raised to heavier weights in 2008,
and there were a lot more birds on feed)

The least profitable company was loosing 21.38 cents/lb. in November last year. Even if feed costs were the same as four years ago, this company would have been loosing money.

Yes, feed costs were up last year for chicken companies. No surprise there. Yet as vocal as Big Chicken and others were about corn prices and ethanol, one was led to believe that was the biggest problem the sector faced.

Turns out, the biggest problem for Big Chicken was simply too many big chickens.

The industry simply over expanded after having several banner years in a row and did not respond to the economic slowdown quickly enough. It's a classic example of "blame shifting" - publicly blaming one thing to draw attention away from the real problem.

(For the record, Hensley forecasted a return to profitability for the chicken industry this year - likely in the 3-5 cents/lb. range.)

Attacks on ethanol continue

The band of misfit environmental activists associated with the Grocery Gang tried to make some noise again this week - bashing corn-based ethanol for a host of reasons that reasonable folks have already realized are bogus.

The National Corn Growers Association (NCGA) noted that it was just another attempt to prevent the ethanol industry from decreasing the United States’ dependence on foreign oil. NCGA noted that there are many environmental benefits from corn ethanol and that corn farmers continue to be good stewards of the environment.

"These environmental groups are stirring up fear for the American public at a time when Americans are already struggling due to the faltering world economy, job losses and high costs of food brought on by some food companies' record profits and greed," said NCGA president Bob Dickey. (Follow the link for more, including info on the environmental performance of corn growers and ethanol.)

Also see some good comments from the Renewable Fuels Association.

According to the Domesic Fuel blog, the groups held a press conference and urged the government to stop promoting renewable fuels like ethanol and said they would rather increase the use of imported oil. During the conference, Clean Air Task Force spokesman Jonathan Lewis told a reporter that "burning gasoline is better than increasing the production of corn ethanol."

Visit Domestic Fuel to have a listen.

Of course, as always with groups like this, their claims are based on loose facts and they don’t offer any real solutions. Just making noise in an attempt to drum up donations.

These are the same enviros who don't like biotechnology and other production technologies, either. They like to live in the past and complain about a future that only exists in their mind.

Op ed: Debunking myths of corn, ethanol

David Gibson, executive director of the Texas Corn Producers Board, wrote an op ed that discusses the corn, ethanol and food prices "discussion" that took up a chunk of the last year. To view the commentary, click here.

Gibson, whose group helped put together TexasPriceCheck.com, made many good points - including that food prices went up with oil/energy costs but have not come down as these costs dropped. He also noted that the Grocery Gang's campaign to place the blame for its price increases on corn and ethanol was simply off base.

Here is his conclusion:

There is no way that our country can achieve its goal of energy independence without increasing ethanol production. The low price being paid for corn is bad news for farmers, some of whom will not be able to cover their production costs. But it proves we have enough corn for food and for ethanol to reduce foreign oil imports. Now we just have to wait for the big food manufacturers to give consumers a break at the grocery checkout line instead of pocketing larger profits.


Interestingly enough, a new set of consumer price figures from the Bureau of Labor Statistics came out this week. It noted that food prices increased 0.2 percent in November - the smallest increase this year. (Gas dropped another 29.5 percent in November.) The report noted that the index for meat, poultry, fish and eggs turned down in November - for the first time since February - falling 0.7 percent.

Anti-ethanol group falls flat

The Grocery Gang is having a rough time of it. Even their own leading-question survey doesn't much support its misguided argument that corn-based ethanol should to go away, which it believes would miraculously lower food prices. (Note to self: Corn prices have dropped by more than half; yet food prices are still high. So what gives?)

In fact, in its latest news release, the group said corn ethanol was responsible for only 0.55 percent of the expected 5.5 percent increase in food prices this year.

Okay okay…they actually said corn ethanol was responsible for 10 percent of food price inflation - but they're hoping people can't do the math and discover that 10 percent of the expected 5.5 percent food inflation for 2008 (USDA/ERS) equals only 0.55. They want people to hear "10 percent", not the truth.

So if your box of Ding Dongs went up a dime, they argue, corn ethanol is responsible for a penny of that increase. That's their argument! That's it! A good question is: What's responsible for the other 90 percent of the increase – the other 9 cents I'm paying for my Ding Dongs? (This and/or this?)

Back to the survey - After baiting participants with that misleading information, the Grocery Gang still couldn't get a majority of folks to back away from renewable ethanol. Maybe people saw the holes in their argument. Like this hole or this hole or this hole or this hole or this hole or this hole or this hole or this hole or this hole.

The Gang talks a lot about eliminating "subsidies" (unless those subsidies ensure them a perpetually cheap source of grain). And of course they don't talk about the 90 years of subsidies taxpayers have given the oil industry. (Totaling more than $160 billion, according to this anti-subsidy for anything group. Remember that $700 billion bailout that passed in October? It renewed some oil company subsidies. That is how pervasive it is.)

The Gang and Big Food must prefer oil, which is strange since there were environmental groups at the podium - environmental groups that also mislead and twist facts.

What is really mind boggling is that these environmental activists don't want corn ethanol because they don't want corn period. What would that do to modern animal agriculture?

On the radio: Discussing corn and food prices

Brownfield's Ken Anderson had a conversation with the Nebraska Corn Board's Randy Klein today - discussing the dramatic price decline in commodity prices like corn and the lack of corresponding drop in food prices.

Klein noted that corn and other commodity prices never had much to do with the rise in food prices originally, like the Corn Board and others reported time and again, so it is not surprising that food prices haven't dropped, either.

A big factor in food higher prices was higher energy costs - and those have also come down some. That puts food companies, for the most part, in a pretty good spot.

Klein closed by noting grocery manufacturers are doing "pretty well" - and taking advantage of the opportunity. (For more on that, click here.) He also expects that the Grocery Gang is not yet done with its attacks on ethanol.

To listen to the interview, click here.

Grassley wants apology from Grocery Gang

Iowa Senator Charles Grassley sent a letter October 28 to the interim president and CEO of the Grocery Manufacturers Association (GMA) - asking Mr. Molpus when he could expect GMA's member companies to "reduce food prices commensurate with lower input costs."

Grassley reminded the head of the Grocery Gang that GMA and its segregates blamed high corn prices for higher food prices for much of this year, yet now that corn prices are half what they were then, food prices have remained high. Click here for a FoodPriceTruth blog post that links to the letter.

Grassley said GMA did "everything it could" to make ethanol a scapegoat for the rise in commodity and food prices. "Subsequent events clearly prove that ethanol was not the primary driver of those corn prices," he wrote.

He also called out one of GMA's spokesmen, who has recently been quoted in a couple of papers continuing his ill-conceived mantra.

Grassley told DTN's Chris Clayton that an apology from GMA - or lower food prices - would be nice.

On Wednesday, almost on cue and providing Grassley with more ammunition, Kraft Foods reported that it's third-quarter net income of $1.4 billion was more than double last year's income - thanks to price increases and cost cuts.

Don't expect lower food prices anytime soon

Here's the opening line from a Wall Street Journal article: Grain and soybean prices have fallen by about 50% since their summer highs. But don't expect grocery prices to drop anytime soon.

Other than starting a sentence with "But", they got that right.

It notes that food companies are quick to raise prices and slow to lower them. No surprise there. In fact, the article reported that food company stocks have out performed the broader stock market -- profits for General Mills, for example, will jump to $4.18 a share next year from $3.81 this year. Kelloggs will go from $3.02 to $3.32, while Nestle's earnings will jump 11 percent. That's pretty good considering the economic situation in this country and abroad.

The paper unfortunately gave ink to the one of the Grocery Gang's chief "sky is falling" spokesman -- and didn't bother to mention the word "oil" or "gas" in relation to increased costs that these food companies have (and are) facing.

Oil and energy were mentioned here, in an article about "sticky" prices - about how food prices go up but don't often come down. In other words don't expect the price of your fruit crunchies to get smaller - although the package may.

FoodPriceTruth (click here for the report) and Consumer Reports (click here) have highlighted another way food companies pad their margin: Make products smaller (and sometimes increase the size of packaging to fool us). FoodPriceTruth has a great chart showing the increasing profits of some big food companies.

Isn't it a bit disingenuous for these organizations to blame ethanol and corn growers for higher input costs at the same time their profits are going up?

Big Chicken Little cries wolf

Five months ago this week, news broke that the Grocery Gang had declared war corn based ethanol - claiming the sky was falling because corn prices were higher than the historical average. They ignored record oil and fuel prices at the time and how that impacted their bottom line and every product on every shelf in the country.

As reported in this post, the Gang - a wealthy lobby of more than 300 food and beverage makers and marketers like Kraft Foods, Miller Brewing, Dean Foods and ConAgra - made and marketed, a "highly believable yet highly fake food vs. fuel debate." Part of the Gang was Big Chicken, which this post pointed out provided the seed money in the form of a $100,000 donation and a first class plane ticket for Texas Governor Rick Perry to challenge the Renewable Fuels Standard. Fortunately, EPA saw through the Gang’s stack of half-truths and denied the waiver.

Back when the Grocery Gang’s campaign was made public it fueled considerable attention to ethanol and corn production, with the anti-ethanol crowd inexcusably (and irresponsibly) blaming ethanol and corn for food riots, a lack of food in developing countries and more. Over time these positions softened as people learned the truth about ethanol - but challenges remain yet today. And, of course, all of this ignored the fact that the Grocery Gang continued to make pretty darn good profits. Not a bad PR move on their part - blame ethanol while you continue to rake it in.

But here we are today, Oct. 15, and December corn futures closed at $3.88, with cash prices in the countryside well below that and likely below the cost of production for many corn growers. If Big Chicken Little isn’t buying all the corn it can, well, that’s their problem. But they certainly shouldn’t be pointing fingers - unless they’re looking in a mirror.

A poultry producer who gets it?

Sanderson Farms released it's third quarter results this week. The fourth-largest poultry producer reported a $3.6 million loss but avoided playing the blame game -- unlike some of the bigger bird companies who freely (and ignorantly) toss around anti-ethanol adjectives.

Joe F. Sanderson Jr., chairman and chief executive officer, said the company's results reflect "difficult market conditions for our industry," and even though retail and export demand for chicken was strong during the quarter, "casual dining and food service customers have been affected by a significant decline in restaurant traffic due to weak economic conditions and higher fuel prices."

This acknowledgment, that high fuel costs impact the dollars consumers have to spend, is important and very correct.

Yes, Sanderson also noted that its feed costs are up, but he didn't blame biofuels or government policies supporting them. He just said the higher costs and the imbalance between domestic supply and demand in the food service markets "resulted in much lower margins."

He concluded by saying: ...having been through volatile cycles, we remain confident that the fundamental rules of supply and demand will work to maintain industry profitability over the long term.

Well said.

Sanderson's talk of restaurants reminded me of a blog entry by DTN's Chris Clayton. He wrote about the world's largest food distributor: Sysco. In a Wall Street Journal article about the company, it said that higher costs for "fruit, vegetables and dairy products have been the main drivers of inflation in the sector," and not "center of the plate meat products."

"Meat producers have not been the biggest contributors to inflation," the article quoted Dick Schnieders, Sysco's chairman and CEO. Schnieders added that his company was working with customers, which are largely the nation's restaurant industry, to lower costs -- by redesigning menus and using cheaper ingredients.

Schneiders said that some restaurant chains had not raised menu prices for seven or eight years!

Chris Clayton observed: Of course, it also raises the question of whether these restaurants got by for seven or eight years without raising prices because they were able to live on flat-priced commodities for nearly a decade as well.

Food companies: Raising prices to fatten their bottom line

FoodPriceTruth.org put out a news release today that that says the nation's largest food companies, who happen to be members of Grocery Manufacturers of America (the Grocery Gang), have seen their profits soar over the past 12 months -- as much as 121% in the case of the Campbell Soup Company.

Brooke Coleman, a FoodPriceTruth.org spokesperson and founder of the New Fuels Alliance, said food corporations would “rather spend millions of dollars on an ethanol smear campaign than explain to consumers why their food prices are so high."

Here are a few highlights:

• Kellogg's Q2 net earnings (30 July) were $312 million, a 4% increase over last year's. Kellogg's stated in their own press release that: "Results were driven by strong execution, innovation and price realization..."
• Sara Lee, which earned $242 million in the Q3 of fiscal 2008, $150 million more than the same quarter last year -- which is an increase of 61.2% -- also attributed higher profits to raising their prices. From their press release announcing their Q3 profits: "Net sales up 10.5%, driven by higher unit volumes, price increases and the strong euro..."

"Customers aren't just paying for commodity price increases, they are also paying a tax added on by the food companies because they think they can get away with it," Coleman said.

For the full report, click here (.pdf file).

Will lower corn prices mean lower food prices?

That's a question posed today by the Nebraska Corn Board. It asked the question because corn prices have fallen about 25 percent over the last month. Since the Grocery Gang blamed higher corn costs for its rising prices, now that corn prices have come down some, will the Grocery Gang lower its prices, too?

Said Don Hutchens, executive director of the Nebraska Corn Board: We believe the answer is no, they won't lower prices a penny. The reason is what we've said all along, that the main driver in higher food prices is high oil prices.

The news release (click here to view) points out that it takes 21 cents worth of diesel to deliver a single box of corn flakes to the store shelf. The cost of corn in that same box? Less than 7 cents. “It's pretty easy to see how fuel and energy costs impact food price," Hutchens said.

Kraft Foods, one of the players in the Grocery Gang's efforts to blame higher food prices on corn farmers, reported quarterly profits this week of $879 million, up 10 percent from last year. Unlike corn growers, who have to take the price offered by the market, food companies, it seems, are pretty good at passing long their higher fuel and energy costs.

UPDATE: Here's a good article from the Grand Island Independent on this subject.

CornsTALK: Charging ahead with the truth

The headline on the 2008 summer edition of the Nebraska Corn Board's CornsTALK publication says it all: Charging ahead with the truth on food and fuel.

Veritas -- the word below the corn kernel in the farmer's flag -- means truth in Latin. And in this issue of CornsTALK, that's exactly what is discussed -- efforts by the Nebraska Corn Board, National Corn Growers Association and others to spread the truth on the food and fuel issue.

In addition to discussing the anti-ethanol campaign led by the Grocery Gang, a number of facts are presented, including a few Kernels of Truth.

To download a .pdf of the quarterly newsletter, click here.

The 'Astro-Turf' grocery gang campaign

Columnist and former farm boy Alan Guebert pointed his pen this week at the "grocery gang" -- the groups behind the recent anti-ethanol campaign. Read it here.

Guebert said: "The gang — a wealthy lobby of over 300 food and beverage makers and marketers like Kraft Foods, Miller Brewing, Dean Foods and ConAgra — made, then marketed, today’s highly believable, highly fake food vs. fuel debate." As fake as Astro-Turf.

The gang hired Glover Park, a Beltway PR firm, which came up with a plan to sell “a federal agency-level or legislative solution to the economically, environmentally and socially untenable ethanol policies now in place…”

Within weeks, anti-ethanol seeds, bought by GMA and planted by Glover Park, take root. Everyone from the New York Times to World Bank President Robert Zoellick is linking American ethanol to starving Sudanese children or worse.

But wait. Aren’t other, more powerful market forces—global grain demand outpacing production seven of the last nine years, crude oil prices 500 percent taller than 10 years ago, inclement weather—propelling grain prices more than U.S. ethanol?

Sure, but don’t tell the grocery gang.

Falling profit margins, not honesty, is behind their nasty, divisive campaign.

Even worse, these truth-challenged food giants are using the poorest of the poor, “…hunger, food aid, poverty, development, senior, children,” to reclaim their fat margins.

In a town long-known for its shameless demagogues, these folks take the cake.