Half-Baked Claims

Recently, the American Bakers Association and other food processing groups have erroneously and disingenuously blamed ethanol for the rise in prices for all foods. Specifically, the bakers have cooked up a line that American farmers are now planting more corn for ethanol production at the expense of wheat acres. However, the National Agricultural Statistics Service (NASS) notes that 2007 saw the highest number of wheat acres planted in the past four years. Farmers planted more than 60 million acres of wheat last year, up more than 3 million acres from 2006. (Source: NASS Crop Production 2007 Summary report)

The two major factors driving the wheat market today are the consecutive droughts in Australia, a leading wheat producer and exporter, and growing global demand. As David Streitfield noted recently in an article in the New York Times, “Now [wheat] prices have more than tripled, partly because of a drought in Australia and bad harvests elsewhere and also because of unslaked global demand for crackers, bread and noodles. In seven of the last eight years, world wheat consumption has outpaced production. Stockpiles are at their lowest point in decades.�

“The idea ethanol production is the driving factor behind high wheat prices is half-baked,� said Renewable Fuels Association President Bob Dinneen. “American farmers increased their wheat production in 2007 at a time of poor harvests and surging demand around the globe. To single out the American ethanol producer ignores the facts.�