Bridging the gap in feed vs. food debate

In the video posted here, the Council for Agricultural Science and Technology (CAST) uses information from its Issue Paper, Animal Feed vs. Human Food: Challenges and Opportunities in Sustaining Animal Agriculture Toward 2050, to educate consumers disconnected from the food they eat.

Dr. Larry Berger, Department of Animal Science at the University of Nebraska-Lincoln, and professors from other universities, shares about meeting the need of feeding the growing population, and battles misconceptions presuming animal agriculture competes for human food supplies.

Dr. Jude Capper also talks about land that is suitable for food production. Obviously, we can grown corn well here in the “Cornhusker” State and Montana can raise cattle well because of the grassland. Not all land is suitable for any type of agriculture, therefore we can’t grow more food crops on land that it is not suitable for.

Dr. Berger says, "During the last century, many consumers lost touch with food production; they need facts to make wise choices."

Take time to watch this video and share with influencers you know in your community.

Nebraska Food, Fuel, Water Contest

We all know that when talking about food, fuel, and water that Nebraska is a state that should be mentioned. The Nebraska Corn Board has recently partnered with the Nebraska Soybean Board and the Nebraska Wheat Board to sponsor a photo contest.

To enter the contest all you have to do is enter a photo of food, fuel, or water from Nebraska that has been taken within the last three years. The deadline is November 1, 2012 with the best picture in each category winning an Ipad. For more information about the contest visit the website: http://innovate.unl.edu/photocontest

FREEDOM film promotes ethanol

Last week, the screening of the documentary film, FREEDOM, was in Lincoln, sponsored by Green Plains Energy and The Joslyn Institute for Sustainable Communities.

The film focused on the use of ethanol as the most sustainable fuel for transportation –the energy that is in the biggest demand. These important points were covered in the film:

• Ethanol does not require more energy to make than it yields.

Argonne National Laboratory research has shown that corn ethanol delivers a positive energy balance of 8.8 megajoules per liter. The energy balance from second-generation biofuels using cellulosic sources is up to six times better, according to a study published in Biomass and Bioenergy Journal.

• Ethanol does not take food away from humans.

Only 1 percent of all corn grown in this country is eaten by humans as sweet corn. The rest is No. 2 yellow field corn, which is used in animal feed, food supplements and ethanol.

• Ethanol does not emit more greenhouse gases than gasoline.

A 1996 EPA study analyzing sources of air pollution confirmed that gasoline vehicles and non-road equipment are the largest contributors to vehicular gaseous hazardous air pollutants. However, another study showed ethanol reduces tailpipe carbon monoxide as much as 30 percent and tailpipe particulate matter emissions by 50 percent. Also, the Journal of Industrial Ecology at Yale University published a study in 2009 that found that greenhouse gas emissions are reduced by up to 38-59% when using ethanol as a transportation fuel.

• Ethanol can be made from waste.

Cellulosic ethanol can be made from agricultural waste and biomass such as corn cobs and stover, wheat straw, wood, energy crops & even municipal waste.

• Ethanol is cleaner burning.

Compared to gasoline, ethanol reduces every single tailpipe emission (CO; CO₂; smog; particulates; NOx and SOx) because ethanol contains 35% oxygen and results in a higher temperature burn.

• 12 billion gallons of ethanol were produced in Canada and the US in 2010.

This will grow to 36 billon gallons by 2020. Currently, the ethanol industry replaces 364 million barrels of imported oil each and every year in the USA and Canada.

• There are 8 million flex fuel vehicles already on the road, which is 3% of US vehicles.

We’re adding 800,000 to 1 million new flex fuel vehicles each year. There are already over 2,200 E85 and ethanol blender stations with over 60 E85/blender stations per month being installed.

• Ethanol creates jobs and is good for the economy.

A major study by the Windmill Group identifies 645,000 jobs created by ethanol in the USA and $92 billion.
After the film, they had a three-member panel including:

• Todd Becker, CEO of Green Plains
• Cecil Steward, Pres/CEO of The Joslyn Institute
• Lt. Gov Rick Sheehy

There was good discussion and interaction from the attendees. Lt. Gov. Sheehy was first to boast on Nebraska’s great position being the best situated for corn, ethanol and livestock production. The ethanol industry in Nebraska produces 2 billion gallons per year, which escalates into job creation, new technology and co-products to be used by livestock.

The discussion of first-, second- and third-generation biofuels was an important topic and Todd Becker explained how corn’s role is so important in that. In corn-ethanol production, one-third of the kernel is the starch used to make ethanol fuel, one-third is protein that is passed through to use in distillers grains to feed livestock, and the last one-third goes into CO₂. The role of second-generation biofuels comes into play in using the CO₂ to grow algae, for example, which is then able to make food, feed and fuel again.

For more on the film, watch the teaser below or go to www.thefreedomfilm.com.

Busting the 5 Myths of Ethanol: Myth #2

If you’ve been to the grocery store lately, you have probably noticed your food bill is a little more expensive than what it was a year ago. There is no doubt that food prices have rose a bit and that many of us are now watching what we throw into our cart. Although it can be frustrating having to pay more for food, it is hard to blame a certain industry or company for the rising prices of food when there are so many factors involved in getting food to our plate. However, in recent months, many have been placing the blame of high food prices on ethanol. People are starting to believe that ethanol is taking corn away from food production, which is causing the price of food to rise.

This leads us to our second myth: Ethanol production reduces our food supply. The answer to this myth is FALSE and that ethanol does NOT reduce our food supply. Only 1% of the corn grown in the U.S. is edible corn or more commonly known as sweet corn. This type of corn is what you find in the freezer section of the grocery store or in cans on grocery shelves. The rest of the corn grown in the U.S. is mainly yellow field corn, which humans do not eat and is mostly used in livestock feeds, food supplements, and ethanol.

When looking at what a bushel of corn can produce, it produces 1.5 pounds of corn oil, 17.5 pounds of high protein feed called Dry Distillers Grains (DDG), 2.6 pounds of corn meal, and 31.5 pounds of starch. The starch is the portion of the kernel that is used to produce 2.8 gallons of ethanol. The remaining portions of the kernel are used for animal feed, which reduces and displaces some of the corn and soybeans.

As we mentioned earlier, there are many factors that play into the cost of food, such as processing, packaging, warehousing, and transportation. Much of the price increases in groceries is coming from the increase in energy costs. As energy prices climb, so do the expenses of getting food to the grocery store. Often we forget how much energy is actually used in making our food. Almost every step of food production uses energy. Unfortunately, all the costs associated with the energy usage in food production gets passed on to the consumer, which is why the cost of food seems so high. Out of those costs, only 11.6 cents of every dollar spent on food actually goes back to the farmer according to the USDA.

As you can see, ethanol does not play a factor in the food supply, and DOES NOT have an effect on food prices. So next time you’re in the store, remember that the can of corn you are picking up only represents 1% of the entire corn crop that is grown in the U.S. and that the corn being used for ethanol won’t affect your grocery bill!

Check back on Friday, July 1 to bust Myth #3!

Lincoln Earth Day to celebrate ethanol in Nebraska

By Kim Clark, Nebraska Corn Board Ag Program Manager

This Friday, April 22, marks the day Earth Day has been celebrated for the past 40 years. Many people pledge to help on Earth Day to secure a healthy environment for the future. This can be is done through environmental education, planting trees, water conservation, promoting a green environment, and more.

America’s corn farmers also help the environment every year. They have reduced greenhouse gas emissions, reduced nitrogen utilization, and grow more on less acres. The corn our farmers grow is used for food, feed, fuel, and fiber – all that from just one crop!

The starch portion of the corn kernel is used to make ethanol fuel, and the protein portion, a byproduct of the ethanol fuel, of the corn kernel is used to feed livestock -- beef, dairy, poultry, and pork. Ethanol, produced by America’s corn farmers, reduces our dependency on foreign oil, reduces greenhouse gas emissions, creates jobs in America, and promotes American agriculture. There are just some of the many ways America’s corn farmers are helping the Earth – which is an everyday habit for them.

In Nebraska, the Lincoln Earth Day event will be celebrated on Saturday, April 23 in Antelope Park at the Auld Recreation Center. The Nebraska Corn Board and Nebraska Ethanol Board are partnering together to promote ethanol. On display will be a flexible fuel vehicle (FFV) truck and blender pump. Blender pumps mix ethanol fuel together for use in FFVs. The fuel blends in blender pumps can be E10, 10% ethanol and 90% regular gasoline to E85, 85% ethanol and 15% gasoline.

Stop by our booth between 12:00 noon and 6:00 pm to learn more about ethanol fuel and FFVs and to show your support for America’s corn farmers!

Podcast: Same pattern emerging on food, fuel; USFRA to talk about farming

In this podcast, Rick Tolman, CEO of the National Corn Growers Association, talks about the contrived "food versus fuel" issue. He notes some people didn't learn lessons from the the last time this came up and that "a lot of it is just an excuse to raise prices."

Tolman noted several studies (like this and this and this) came out stating that corn/ethanol had little to do with food prices - and that we'll just have to work through this process again. "The impact of commodity prices on food prices is minimal and way overstated," he said.

He also provides some background on the U.S. Farmers & Ranchers Alliance, a group made up of 25 national farm agriculture groups. "It's a bold effort," he said.

Nebraska Corn Kernel podcasts are also available on iTunes! Click here to subscribe.

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.

A myth is still a myth when it comes to corn and ethanol, food and fuel

And the myths continue...

Food prices are increasing at the grocery store because of ethanol, the uprising in Egypt occurred because of ethanol, ethanol is taking away from our food supply, there would be fewer hungry people in the world if we didn't use ethanol.

We’ve heard it all before (except the Egypt one, but you get the gist). These are just a few of the myths about corn and ethanol in circulation.

It’s notable, of course, that a recent uptick in all this nonsense began about the same time oil prices began to rise – it wasn’t that long ago oil was $60. It has gradually been inching up but topped $100 today for a while, fueled in part by the continued unrest in oil rich regimes around the world.

And, as noted by the LA Times, this run-up in prices will impact all of us and nearly everything we purchase (notably, food).

Does that remind you of 2008?

For a while in 2007-08 (and again recently), some folks tried to blame ethanol and corn for increasing food prices. Yet like before, corn prices plays a relatively minor role in the grand scheme of things. A bit part not even worthy of side kick status.

Remember the World Bank “correction”? Or FAO?  Or USDA? All concluded that corn prices and ethanol were but a footnote to the real juggernaut to any increase in food prices three and four years ago.

In the end, at least for ethanol, it’s about food AND fuel. While this tends to get lost among the handy sound bites, we need to talk about how food and fuel are being made from the same bushel of corn grown by America’s farmers.

Ethanol companies use about 3 percent of the world’s grain supply for ethanol production and approximately 36 percent of the U.S. corn supply (a corn supply that has grown considerably since 2000 – ethanol doesn’t use more corn from the same-sized pie every year…the pie is getting bigger!).

However, corn ethanol plants also produce distillers grains, a great protein feed for hogs, beef and dairy cattle and poultry. Feeding distillers grains to livestock decreases the amount of other feed ingredients, such as ground corn, corn silage, soybean meal, some hays and other forage, in feed. Although the ethanol industry may use 36 percent of the U.S. corn grain supply, when you add in the millions of tons of distillers grains they also produce to feed livestock, the figures change.

Even countries around the world are catching on – exports of dried distillers grains reached an all-time high in 2010 and will be even higher this year.

The value of corn in food
The Food & Fuel page over at NebraskaCorn.org includes some good points as to the impact of corn prices on some basic foods.

AT $6 corn, a box of corn flakes contains about 8.6 cents worth of corn but the box sells for about $4.00. A gallon of milk costs $2.99. Of that price, dairy farmers receive about 90 cents and about 19.3 cents is attributable to corn. A 2 liter bottle of soda, which contains high fructose corn syrup, contains about a dime’s worth of corn.

Often times packaging (oil) and shipping (again, oil) is considerably more costly than the value of the corn in the box, jug or package.

Reminds me that even the “tub” that holds popcorn at the movie costs more than the popcorn in it. Remember that?

Also remember that even BP acknowledged that biofuels are driving down our dependence on foreign oil. The sooner we get over the ethanol myths and move on the sooner we'll be less reliant on unstable parts of the world for our energy needs.

Other posts of note:

• Food vs. fuel: A false and dangerous premise
• Can we calculate the true cost of our dependence on oil?
• 'Oil will hit $150 again'
• Oil cartel: Oil is too cheap
• Our stable oil supply?

Food, fuel and facts

A great article by Kerry Hoffschneider appeared recently in the York News-Times, which was written following this year's Ag Adventure Tour, a partnership between the Nebraska LEAD Alumni Association with Leadership Omaha to "provide an opportunity for rural and urban leaders to connect and build a bridge of communication across the great state of Nebraska," as Hoffschneider put it.

Hoffschneider covered a number of very good topics, and a few paragraphs are included below.

For the full article,  click here.

In terms of agriculture, I'm not going to apologize for getting information from people directly involved in their industry about their industry. Why would I ask a toaster maker about how cars are designed? Agriculture is no different. Yet, there is sometimes a strange level of expectation from some circles that is making people in agriculture feel as though they need to apologize for working and developing their industry. It's really interesting that we want to, for example, have the latest and greatest cell phones or computers, but when those in the business of farming want to stay cutting edge, there are groups out there who want them to farm like it was still 1920 or sadly, no longer farm or produce livestock at all.

...

That brings me to the ethanol issue and the global picture. On the way home from the Ag Adventure Tour, I had lots of corn to look at from outside my car window and a lot of time to think. I kept thinking about the recent oil spill. I also thought about some email forwards I've received showing pictures of Middle East oil sheiks with their diamond-studded Mercedes and palaces. I also started thinking about men and women, fighting in those countries and dying as we speak. I thought, you know, ethanol makes sense. It just does. I hearkened back to what Hagstrom said on the tour, he fervently motioned his hand towards the window and told the group, “Would you rather try and draw oil from a dead dinosaur somewhere or make fuel with something that we can replenish every year that grows right here at home?

...

Here's another thought to ponder, ethanol is not typically made from corn that should be used for human food. This helps extinguish the “food vs. fuel” debate. Also, as ethanol production uses only the starch of the kernel, the remaining parts of the corn create a by-product called distiller's grain that is rich in proteins and nutrients, making it great feed for livestock. Oh, and according to the Nebraska Corn Board, corn for ethanol use in Nebraska increased from about 200 million bushels in 2003-04 to an estimated 645 million this year and projected 684 million next year. Despite that increase, exports in 2009-2010 were right at the average.

That's just a sample, be sure to read the full article.

Bank error in ethanol's favor

In the game of Monopoly there's a Community Chest card that lets you collect $200 thanks to a bank error in your favor. In the game of real life that includes a media circus or two, you likely won't see a dime. Or even an "Oops, we screwed up. Sorry."

And that's where we stand with a World Bank report that came out last week that updated a "leaked" and draft version that came out, of course, during the dreamed up food/fuel debate involving corn and ethanol two years ago. That leaked report blamed biofuels for 75 percent of the commodity price spike seen during that time to biofuels. The new report: not so much.

Maybe if the new report was "leaked" and made to sound so much more underhanded the folks who jumped all over the first fake report would do an update and correct themselves. Or at least pay everyone $200 for their error.

For some time, corn and ethanol groups noted that higher corn prices during 2007-08 were driven mostly by outside factors, including investor money, high oil prices and trade embargoes put in place by some importers and exporters of certain commodities. Bad weather in some parts of the globe also played a roll. Interestingly enough, the World Bank cited all those points as factors that played a bigger role than biofuels - with the 300 pound gorilla ignored by everyone two years ago ($140 oil) getting top billing.

[For more on food prices and biofuels, see: CBO: Ethanol had minor impact on food prices, Grocery Gang's efforts don't change the facts and High oil prices add $5.1 billion to cost of food programs.]

Here's a quote from the paper, which you can download from the Renewable Fuels Association:

This paper concludes that a stronger link between energy and non-energy commodity prices is likely to be the dominant influence on developments in commodity, and especially food, markets.

And more, relating to the investor money pouring into commodities at the time:

The paper also argues that the effect of biofuels on food prices has not been as large as originally thought, but that the use of commodities by financial investors (the so-called "financialization of commodities") may have been partly responsible for the 2007/08 spike.

A couple more good points (emphasis added):

Clearly US maize‐based ethanol production, and (to a lesser extent) EU biodiesel production) affected the corresponding market balances and land use in both US maize and EU oilseeds. Yet, worldwide, biofuels account for only about 1.5 percent of the area under grains/oilseeds. This raises serious doubts about claims that biofuels account for a big shift in global demand. Even though widespread perceptions about such a shift played a big role during the recent commodity price boom, it is striking that maize prices hardly moved during the first period of increase in US ethanol production, and oilseed prices dropped when the EU increased impressively its use of biodiesel. On the other hand, prices spiked while ethanol use was slowing down in the US and biodiesel use was stabilizing in the EU.

“In reversing course, this World Bank report reaffirms the marginal role biofuels play in world commodity and food prices,” said Renewable Fuels Association President Bob Dinneen. “The RFA has long noted that ethanol production has continued to increase while corn prices have now returned to normal levels. Volatile oil prices, speculation, and adverse weather conditions all played far more significant roles in driving commodity prices to record and near record prices. This report should silence critics in the food processing industry, the livestock industry, on Capitol Hill, and anywhere else that sought to portray ethanol as the boogeyman. With this phony food and fuel discussion put behind us, perhaps a real conversation about America’s energy future can ensue.”

Rob Vierhout, secretary general of eBio, the European ethanol industry organization, noted that, “We have always said that our industry had been wrongly blamed for the food versus fuel crisis and now we are proven right. This report should finally silence those that have blamed the biofuel producers for food shortages, food price increases and for committing a ‘crime against humanity’. It is about time these people recognize the facts.”

Corn carryout stable despite increase in ethanol production

Corn producers in Nebraska and across the country have continued to excel at producing more corn per acre – with yields continuing to advance despite weather that has not always cooperated.

When ethanol production began to ramp up across the country in 2005, there were some concerns about a shortage of corn – concerns which came to the forefront during the false “food versus fuel” debate two years ago.

As the chart shows below, corn carryout numbers have actually remained steady since ethanol production began to grow so quickly. Corn available for feed use has remained stable – and the ethanol plant-produced distillers grains has actually added a new lower-cost feed ingredient to the marketplace.

Vilsack speaks to producers, Commodity Classic 2010

U.S. Secretary of Agriculture, Tom Vilsack, spoke to producers at the 2010 Commodity Classic yesterday. He started his presentation by voicing his admiration for producers and the important jobs they do, while admitting he was a little nervous to be in front of such a significant group!

To hear the podcast of Secretary Vilsack's speach, click here.

Afterwards, Secretary Vilsack was able to talk with producers on the trade show floor at the NCGA booth.

Look for more up-coming posts about Commodity Classic 2010!

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.)

High oil prices add $5.1 billion to cost of food programs

Exxon reached the top of the Fortune 500 list this year - thanks to revenues of $442.9 billion and profits of $45.5 billion.

In fact, oil companies were three of the top five companies on the list. (Chevron and ConocoPhillips were the other two.)

Yet some headlines last week (and tweets and blogs this week) declared that corn-based ethanol was raising food prices - without qualifying where the bulk of food price increases came from - primarily higher energy costs that we all paid to oil companies.

These higher energy costs also drove up the price of producing crops like corn, so the impact there is double.

Exxon's revenues are more than 8 times the value of the entire corn crop this year and last year. Last year's corn crop value: $54.6 billion. This year's: $50.8 billion. At the same time, the cost of producing those crops soared (thanks to high energy prices) and set new records.

Shouldn't the headlines on the Congressional Budget Office report have been "High oil prices add $5.1 billion to cost of food programs"?

(Here's the math for that: If ethanol was responsible for 15 percent of the increase in government food costs, or $900 million, than the total increase in the cost of food programs was $6.0 billion. Subtract $900 million from $6.0 billion and you get $5.1 billion...or $5,100 million. If ethanol was responsible for only 10 percent, high energy costs would be responsible for $5.4 billion.)

The best alternative to oil is not more oil. It's renewable fuels like ethanol. Otherwise next year or the year after we'll be again staring at $100 oil and $4 gas.

It's only a matter of time.

Groups call for hearing on food prices

Folks from the National Farmers Union, Growth Energy, American Farm Bureau Federation and National Corn Growers joined in a news conference today lauding the recent Congressional Budget Office report that concluded the bulk of last year’s food price increases was do to high energy costs. (As in NOT ethanol!)

That seems to me to be exactly what corn growers and many other folks were saying all along. In fact, Tom Buis of Growth Energy said exactly that: The CBO report made a point that we’ve been trying to make for a year.

(Also check out this and this and this.)

The groups also noted today that several hearings were held last year that were an attempt to blame corn and ethanol – and perhaps some of those people should come before Congress again.

Buis reminded people that “someone” out there orchestrated a campaign and they owe us an apology. (Perhaps this is the someone?)

NCGA CEO Rick Tolman said he was looking for an apology from the Grocery Manufacturers Association. “I think that grocery manufacturers and others owe farmers a huge apology for the damage they’ve done to the reputation among consumers,” Tolman says.

Tolman makes some great points - such as it is not a "zero sum game", that the "pie" that is the corn supply is getting bigger, allowing growers to produce plenty of corn for food, feed and fuel.

For the audio from the news conference, visit Brownfield here.

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.)

Schafer: Anti-ethanol crowd has 'no credibility'

The Corn Commentary blog today has a post that features Agriculture Secretary Ed Schafer, who spoke at and spent a few minutes with the media after the Cellulosic Ethanol Summit today.

According to the blog, Schafer said the group that held a press conference yesterday calling for an end to ethanol subsidies "stood up there with no credibility whatsoever," when they claimed that it will take 18-24 months for the lower commodity prices to bring food prices back down.

"I just think that they are totally off base," Schafer said. "They are trying to justify the increased cost and increased profits that they’re making at the expense of another industry and that’s just not appropriate."

For the rest of the info - and an audio interview with Schafer - click here.

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?

Ethanol generates $50 billion in tax revenues

Since 1978, the ethanol industry has generated more than $50 billion in tax revenues - $33.4 billion for the federal government and nearly $17 billion for state and local governments, according to an analyst with LECG LLC. (Figures are in 2008 dollars.)

A Nebraska Corn Board news release noted that LECG's John Urbanchuk reported that ethanol reduced America's tab for imported oil by $97.5 billion since 1978 and reduced farm program payments by more than $3 billion annually since 2006. By his math, that that brings the total return on investment for each dollar expended in the form of a federal tax incentive for ethanol use to nearly 5 to 1.

Don Hutchens, executive director of the Nebraska Corn Board, said the numbers "aren't surprising" and that an analysis of the impact of ethanol production in Nebraska shows similar returns.

In 2006, Nebraska had 12 operating ethanol plants that generated more than $18 million in tax revenues, added more than $1.3 billion in economic output to the state and contributed nearly $100 million in household income, which translates to $40 million in retail spending. Ethanol production in the state has doubled since then.

Hutchens also addressed critics that continue arguing corn should be cheaper - noting that corn prices have fallen by more than half from their highs this summer and may actually be below the cost of production for some corn growers.

Here's his quote: Arguing that we should reduce ethanol production and increase our dependence on foreign oil just so some food companies can have even bigger profits doesn't make sense. One would think these companies would push for alternatives to oil, helping to keep their own energy costs low, because we've all seen what can happen when there's no competition in the energy sector. These groups simply continue to distort the facts and, honestly, their attempts to dump renewable fuels for more oil didn't make sense six months ago and doesn’t make sense now, either.