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Home > Blogs > Taste: Dayton food and restaurants > Archives > 2008 > November > 24 > Entry
Food Fight: corn growers, grocers square off over high grocery prices
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What in the world prompted this catfight — or in this case, food fight? Here’s a copy of a news release I received today from the Ohio Corn Growers Association and ethanol producers:
Big Food’s Greed Comes at Expense of American Families
Grocery manufacturers continue to gouge consumers
COLUMBUS, Ohio - Food manufacturers that are reaping huge profits with skyrocketing food prices continue to look for someone to blame as corn prices and transportation costs continue their steady decline.
At a news conference today, representatives from Ohio’s agricultural and ethanol industries publicly called on big food companies to pass on savings to the consumer rather than gouge them in the grocery lines.
“For months, the Grocers Manufacturers Association (GMA) has spread misleading information about corn and ethanol while they lined their pockets with huge profits,” said Dwayne Siekman, executive director of Ohio Corn Growers Association. “Now that corn prices are down, which is what food manufacturers used as its scapegoat, why do Americans continue to suffer at the grocery store.”
Siekman was joined by Mike Wagner, of Buckeye Renewable Fuels Association, and Mark Borer, of Growth Energy, a coalition of responsible ethanol producers who have joined together to fight the misinformation put forth by large food manufacturers.
The cost of food has increased at a brisk 7.6 percent in the past year, the worst rate of the past 20 years, and has continued to increase while the cost of corn and other commodities have fallen in the past four months. The Bureau of Labor Statistics reports that the price of basic foods in the United States is currently rising at twice the rate of inflation and is expected to continue to rise in the future. Here are a few examples of some of the drastic increases in food staples from March 2007 and March 2008:
— Milk prices - 13.3 percent
— Cheese - 12.5 percent
— Eggs - 29.9 percent
— Bread - 14.7 percent
Big Food is sowing profit growth from these higher prices. Kraft’s revenues increased nearly 20 percent from the year-earlier period and saw net income shoot up in the third quarter to $1.4 billion. Sales at Kellogg’s climbed 9.5 percent and third-quarter net income increased to $342 million, up from $305 million the year earlier.
Noting the rising food prices this past spring, the Grocery Manufacturers Association (GMA) planned an attack in a leaked PR memo (go to GrowthEnergy.org) to distract Americans from the rising cost of food by mounting a campaign against American ethanol producers. Their argument centered on the premise that biofuels production increased the demand and cost of corn, which forced food producers to raise food prices for consumers.
“With the current low corn prices and transportation costs, GMA’s flawed argument has been exposed,” Siekman said. “Ethanol has been proven as the most viable, homegrown alternative fuel right now to help us begin the process of reducing our dependence on foreign oil.”
Siekman said the economic impact ethanol production has on Ohio’s 2,000 corn growers, as well the overall U.S. economy, is remarkable. For example, in Ohio, the three POET facilities in Leispic, Fostoria and Marion employ about 120 local people, while The Anderson’s/Marathon plant boasts another 45 jobs. These four plants alone will produce almost 300 million gallons of ethanol.
Overall, Ohio’s ethanol plants invested over $700 million in the state employing 210 people and spurring local economic activity with growth in rail sectors, improvement in local roads and tax investments into communities while giving Ohio farmers another market for their corn and less reliance on federal help.
The U.S. Department of Energy estimates that for every one billion gallons of ethanol produced, 10,000 to 20,000 jobs will be added. In 2007, the ethanol industry contributed $47.6 billion to the nation’s GDP, created more than 200,000 jobs and generated an estimated $4.6 billion in revenues for the federal government.
About Ohio Corn Growers Association
The Ohio Corn Growers Association represents the interests of more than 20,000 corn growers in the state. OCGA works in Washington and at the Ohio Statehouse to ensure government participation in legislation is beneficial to Ohio’s growers. Farmers provide food, feed and fuel to power Ohio. For more information, go to http://www.ohiocorn.org.
About Growth Energy
Growth Energy is a group committed to the promise of agriculture and growing America’s economy through cleaner, greener energy. Growth Energy members recognize America needs a new ethanol approach. Through smart policy reform and a proactive grassroots campaign, Growth Energy promotes reducing greenhouse gas emissions, expanding the use of ethanol in gasoline, decreasing our dependence on foreign oil, and creating American jobs at home. More information can be found at GrowthEnergy.org.
But what in the world is going on? Well, my reporting colleague Laura Bischoff did find this little kernel from the grocery manufacturers association web site that may explain some of the garment-rending:
July 10, 2008
(Washington, D.C.) - Grocery Manufacturers Association (GMA) Vice President for Federal Affairs Scott Faber today testified before the U.S. Senate Committee on Environment and Public Works regarding Federal food-to-fuel policies and their negative impact on the environment.
“Congress should carefully evaluate the environmental impacts of food-to-fuel policies, said Faber. “Diverting food crops to our fuel supplies has artificially increased the price of commodities, accelerating the conversion of pasture and forest lands to crop production at home and around the globe, releasing carbon into the atmosphere and reducing the availability of carbon ‘sinks’ that help sequester carbon. In addition, increased production of row crops has increased water pollution, compounded water shortages, and contributed to the loss of habitat for wildlife. In particular, increased fertilizer use has increased the amount of nitrogen and phosphorous being washed into rivers and bays, including the Chesapeake Bay and the Gulf of Mexico, and will increase ground level ozone in some regions. Increasing the use of distiller’s grain - a byproduct of ethanol production that is fed to animals but has less nutritional value than feed - also increases the amount of phosphorous reaching waterways.
“We urge Congress to freeze federal food-to-fuel mandates, restructure food-to-fuel policies to reduce the use of food to produce fuel, and accelerate the development of advanced and cellulosic bio-fuels that do not pit out energy needs against the needs of the hungry and the environment.”
Laura called the Grocery Manufacturers Association for comment on the charges leveled in the press conference, and received the following from Scott W. Openshaw, communications director for the GMA:
“Over the last few years commodity prices have been extremely volatile. Until Congress facilitates the rapid development and delivery of second generation biofuels that don’t pit our energy needs against our food and feed needs, this volatility will only continue. Commodity prices rose dramatically between 2005 and 2008. Even after recent declines, farm-level corn and soybean prices have more than doubled since 2005/06. Retail food costs continue to reflect record commodity prices and volatility.”
Anybody else have any insights about (or beyond) this brouhaha?
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