GoodFuels

Unhappy Reactions to EPA Decision

Within 30 minutes of the EPA announcement that the request for a waiver of the Renewable Fuels Standard had been denied, members of the Big Food coalition held a press conference to express their disappointment.

Representatives from the National Turkey Federation, American Meat Institute, National Chicken Council, Texas Cattle Feeders, American Bakers Association, and American Beverage Association recited a litany of woes that will now befall the country as a result of the decision, predicting that within 2-3 years we will face food shortages and be forced to increase imports to meet our needs.

Once they opened it up for questions, however, reporters seemed less than sympathetic. The first questioner was Matt Wald of the NY Times, who challenged them to explain why they were pushing for a waiver when it seemed evident that demand for ethanol was driving production more than the RFS. This appeared to catch the food group totally off guard, so much so that Scott Faber of the Grocery Manufacturers Association had to jump in from the sidelines to try and cover for them. To really appreciate this, you have to listen to the entire eight minute exchange, complete with pauses, stumbling and mumbling.

Another great question came from Lynn Henderson of Agrimarketing Magazine, who asked “In light of these higher grain prices, why is it that many of the major food companies are reporting record profits?”

Faber answered that the food manufacturers were “finding ways to reduce costs” and are doing “extraordinary things to avoid passing the costs” on to consumers. Riiight - that’s it.

One more thing that I found interesting about the press conference was the opening statement from the American Bakers Association representative, who commented that Kansas now produces more corn per acre than it does wheat. When I checked that out, I discovered he was right. Kansas does produce more corn PER PLANTED ACRE than wheat. Last year, Kansas harvested 518 million bushels of corn from 3.7 million acres of corn - but less than 284 million bushels of wheat from 8.6 million acres. With wheat yields at 33 bushels an acre compared to 140 bushels for corn - every acre of corn produces more bushels compared to an acre of wheat! Point being, that is the kind of misleading rhetoric this group uses to try and make people believe that corn for ethanol is causing the prices for all commodities to go up.