According to the president’s Council of Economic Advisors, the total global increase in corn-based ethanol production accounts for only about three percent of the recent increase in global food prices.
That was the main summary point of a USDA press briefing held Monday in Washington DC to present their case for producing both food and fuel in the United States.
Presenting the data was USDA chief economist Dr. Joe Glauber, who pointed out all the factors that have contributed to higher food prices in the last year including economic growth, weather, export restrictions, higher food marketing and transportation costs, and finally, increases in biofuels.
Agriculture Secretary Ed Schafer said, “It’s clear that while bioenergy generation does have some effect on prices, it is not a major effect. It’s not even a big effect.”
Schafer said he had talked to the people who have “initiated these underground things that have been going on” to influence public opinion about ethanol incentives and found that while they understand that higher energy and transportation costs are the driving factor for increased food prices, they think “it’s easier” to target corn and ethanol.
“The change in the Renewable Fuels Standard, the change in the (ethanol) tariff or duty, isn’t going to effect food prices,” Schafer said. “We need to focus on things that will actually have an effect, instead of a short-term political solution we need to look long-term, because we have a long-term problem here.”
When asked directly if he was referring to the Grocery Manufacturers Association (GMA) campaign against ethanol that was revealed last week by the Capitol Hill publication Roll Call and publicized by Senator Charles Grassley (R-IA) and others, Schafer said yes.
“Clearly, we have a difference of opinion with GMA,” said Schafer. “They are a trade organization driven by their membership and evidently that is the course they chose to take, not one that I would take.”
Link to USDA power point presentation slides
Read transcript of press briefing here.
The Capitol Hill publication Roll Call has revealed that the nation’s largest food corporations have been waging war on ethanol over the past few month.
Roll Call, which obtained confidential documentation of the effort, reported Wednesday, “Rising food and fuel prices have led the biofuels industry to take a beating on Capitol Hill the past few weeks. But the pummeling hasn’t been by chance — it’s part of a concerted effort spearheaded by the Grocery Manufacturers Association and the Glover Park Group. GMA has been leading an ‘aggressive’ public relations campaign for the past two months in an effort to roll back ethanol mandates that passed in last year’s energy bill.”
Among the documents obtained by Roll Call was the GMA’s proposal request “to build a groundswell in support of freezing or reversing some provisions of the 2007 Energy Bill and for the elimination/reform of ethanol subsidies and import restrictions.”
Glover Park Group’s proposal response included the number one objective to “obliterate whatever intellectual justification might still exist for corn-based ethanol among policy elites.”
These documents should be viewed with outrage by every farmer and ethanol producer in the country.
GMA’s Request for Proposal
Glover Park Group’s Media Campaign Proposal
Biofuels have become an essential component of the world’s motor fuel supply, according to a report released today by the International Energy Agency (IEA).
IEA estimates that biofuels will account for nearly two-thirds of the non-OPEC oil supply growth this year, or more than 1.5 million gallons per day.
“While it seems unlikely that biofuel targets will be reversed in the near future, it is sobering to realize the amount of oil that would be needed to replace them,” the IEA report said.
According to the report, replacing the global supply of ethanol and biodiesel-based biofuels added to the U.S. and European markets since 2005 would require an additional 1 million barrels of crude oil to be processed per day.
Read stories from Bloomberg and Dow Jones.
RFA President Bob Dinneen says the report points out the importance of ethanol production. “In the face of record oil, gasoline and diesel prices, it might seem pennywise but would be pound foolish to walk away from our commitment to biofuels and a diversified energy future,” he said.
Sen. John Thune (R-SD) plans to introduce a bill this week that would let buyers of cars or trucks capable of running on up to 85 percent ethanol enriched fuel claim a $1,000 tax credit.
Thune says we can’t conserve our way out of our dependence on foreign oil, “We’ve got to start taking steps to diversify our fuel supply.”
According to an AP story out of Sioux Falls, Thune’s bill would allow consumers purchasing an optimum flexible fuel vehicle - which runs on E-85 with an improved fuel economy similar to that of a gasoline-powered ride - to claim a $1,500 tax credit.
Thune, who was among a bipartisan group of Senators that sent a letter last week to Environmental Protection Agency Administrator Stephen Johnson supporting the Renewable Fuels Standard (RFS), says his legislation would encourage consumers to buy more flex-fuel vehicles, which would in turn increase demand for E-85 and blender pumps.
In case you don’t have time to the entire one hour press conference from last week, here’s a six minute summary. This “Ethanol Report” podcast features comments from the four agriculture and ethanol industry leaders who participated in a press conference on April 30 about the role of biofuels in food price increases. Featured are former Agriculture Secretary John Block, National Corn Growers Association CEO Rick Tolman, National Farmers Union president Tom Buis and RFA president Bob Dinneen.
You can subscribe to “The Ethanol Report” by following this link.
Or you can listen to it on-line here: 
Ethanol Report 12 (5:45 MP3 file)
As the House Subcommittee on Energy and Air Quality heard testimony regarding the Renewable Fuels Standard (RFS) on Tuesday, oil hit yet another record high of $122 a barrel.
RFA president Bob Dinneen reminded the committee of that several times during the hearing, having to correct his own pre-prepared remarks. “Mr. Chairman, the RFS made sense when you passed it in December and prices were $90 a barrel,” Dinneen said. “It makes more sense today with crude oil prices at $120 a barrel. I’m sorry, just while this hearing has been going on, the market has increased and we’re now looking at $122 a barrel oil.”
“Ethanol is the only tool we have today that can address the nation’s most serious economic issue – our dependence on imported oil and the rising price of gasoline and crude oil,” he said.
Listen to Bob’s testimony here: Dinneen Hearing Testimony (6:00 MP3 file)
It was publicity hound P.T. Barnum who is credited with the quote “I don’t care what they say as long as they spell my name right.” Wonder if his name was as hard for the media to get right as “Dinneen.”
Bob’s name is frequently spelled “Dineen” by the media - like this recent Reuters story. Now seriously, they could spell Urbanchuk right but not Dinneen?
When I was in Journalism school back in the old days, it was considered a major fact error to get someone’s name wrong. And in today’s world of the internet, double-checking is just a click away.
In fact, the article was written by one person and edited by another. Someone should have been able to check.
The good news is, it was a positive article making RFA’s point that a waiver of the RFS would increase gasoline prices even more. So, in this case, Bob probably doesn’t care that they spelled his name wrong - the message was more important.
Update: Just noticed that the AP story on today’s hearing about the RFS by the House Subcommittee on Energy and Air Quality also spelled Bob’s name wrong, even though it is spelled correctly on the witness list. Sorry, but as a journalist that really bothers me.
The media was very interested in hearing the story that agriculture and the ethanol industry had to tell about food prices during a press conference Wednesday at the National Press Club.
Former Agriculture Secretary John Block, National Corn Growers CEO Rick Tolman, National Farmers Union president Tom Buis and RFA’s own Bob Dinneen gave opening statements about the facts on food price increases and entertained about 40 minutes of questions from reporters present and on the phone. They covered nearly every topic on the ethanol waterfront and gave highly informative answers to probing and intelligent questions from the press. Hopefully this will translate into some balance in reporting about the food versus fuel issue.
It’s a big file and may take a while to load but you can listen to the entire one hour plus press conference here: Food Price Press Conference (1 Hour MP3 file)
You can see an online photo album from the press conference here: RFA Press Conference Photo Album
Updated with recorded video
Today at 1pm eastern time, RFA is hosting a press conference at the National Press Club. In attendance will be:
The Honorable John Block, former Secretary of Agriculture
Tom Buis, President, National Farmers Union (NFA)
Bob Dinneen, President of the Renewable Fuels Association (RFA)
Rick Tolman, CEO, National Corn Growers Association (NCGA)
The topic will be: “Farmers and Ethanol Industry to Present the Facts On Food Price Increases.”
We are working to try and stream the press conference live on on UStream.tv using the player below. At the time of the conference, you should be able to click on the player and see the live stream. This is an experiment, so we will see how it works. Regardless, we are recording the conference and will have a full update available here afterward.
Update: The live stream worked! Here is a recording of the first 20 minutes or so:
This was the first time we used this new streaming service. It recorded in segments so here’s another segment which takes you through all the opening statements.
VeraSun Energy broke ground on a new facility last week that will tap into ethanol for oil.
VeraSun’s patent-pending Oil Extraction process is designed to yield 7-8 million gallons of corn oil annually from 390,000 tons of distillers grains currently produced at VeraSun’s ethanol production facility in Aurora, S.D. The corn oil will then be made available for sale into the biodiesel market, thus increasing the renewable fuel supply without an additional feedstock supply. The result of the process also includes enhanced distillers grains through the concentration of protein and the reduction of fat. One gallon of corn oil yields roughly a gallon of biodiesel.
VeraSun expects to start producing the corn oil later this year. The company also plans to use the process at two of its plants in Iowa next year.
Among those giving a hand at the groundbreaking were South Dakota Governor Mike Rounds, Reid Jensen with the South Dakota Corn Utilization Council and Matt Hartwig of the Renewable Fuels Association.
« More Past Entries
Subscribe to this Blog
How to subscribe