Healthy soil and sustainable growing

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Less corn in the fields means higher food costs
3/31/2008 -
Mary Clare Jalonick | The Associated Press
http://www.santafenewmexican.com/Washington/Less-corn-in-the-fields-means-higher-food-costs

WASHINGTON — From chicken nuggets to corn flakes, food prices at grocery 
stores and dinner tables could be headed even higher as farmers cut back on 
the land they're planting in corn this spring.

Corn prices already are high, and a drop in supply should keep them rising. 
Combine that with the huge demand for corn-based ethanol fuel — and higher 
energy costs for transporting food — and consumers are likely to see their 
food bills going up and up.

Farmers are now expected to plant 86 million acres of corn this year, the 
Department of Agriculture predicted Monday, down 8 percent from last year, 
which was the highest since World War II.

Corn is almost everywhere you look in the U.S. food supply. Poultry, beef and 
pork companies use it to feed their animals. High-fructose corn syrup is used 
in soft drinks and many other foods, including lunch meats and salad 
dressings. Corn is often an ingredient in breads, peanut butter, oatmeal and 
potato chips.

Corn components are even used in many grocery store items that aren't edible 
— including disposable diapers and dry cell batteries.

When the corn that goes into those products goes up in price, increases 
eventually can be passed along to consumers.

And corn prices have skyrocketed in recent years, almost tripling since 2005. 
They have been pushed along by the burgeoning ethanol industry, which turns 
the crop into fuel, and by rising worldwide demand for food.

"People who are working families, just barely making it and already paying 
higher prices for gas and home heating oil are going to be shot in the pocket 
by higher food prices," said Carol Tucker-Foreman of the Consumer Federation 
of America.

Richard Lobb of the National Chicken Council said recent increases in the 
cost of corn feed have been absorbed by larger chicken companies, such as 
Pilgrim's Pride Corp. or Tyson Foods Inc., that provide feed to poultry 
farmers. But that could change.

"At a certain point we have to readjust and get back to square one," Lobb 
said. "The only people who have money ultimately are consumers."

Tucker-Forman of the Consumer Federation of America and Scott Faber of the 
Grocery Manufacturers Association both say rising food prices could be 
stemmed if Congress would pull back subsidies for the ethanol industry.

The number of ethanol plants has almost tripled since 1999, and more are 
being built, according to the Renewable Fuels Association. Such plants could 
gobble up more than a quarter of the country's corn crop.

"Food prices being driven by the food-to-fuel mandates will most 
significantly affect the working poor," Faber said.

Matt Hartwig of the Renewable Fuels Association said the higher prices can't 
be blamed only on the ethanol industry.

"There are a host of factors contributing to higher corn prices — surging 
global demand to feed people and livestock, a weak dollar encouraging exports 
and rampant speculation — that have a far greater impact than America's 
ethanol industry," he said.

According to the Agriculture Department, corn planting is expected to remain 
at historically high levels but may dip this year because of the high expense 
of growing corn and favorable prices for other crops, such as soybeans.

As many farmers have switched, soybean planting is expected to be up 18 
percent this year, at almost 75 million acres. Farmers are also expected to 
plant more wheat this year, which could lower retail prices for pasta and 
bread.

The Department of Agriculture report is based on sample surveys of 86,000 
farm operators in the first two weeks of March.

Terry Francl, a senior economist for the American Farm Bureau Federation, 
predicted Monday that corn prices will continue to rise, but he said 
consumers shouldn't panic just yet.

Many farmers will take a look at the report and decide to plant corn instead 
of other crops, he said, and weather conditions could also change things.

"We're going to have to wait until we go through the spring planting season," 
he said.

John Hoffman, a soybean grower from Waterloo, Iowa, and president of the 
American Soybean Association, said farmers will always find ways to grow more 
crops to stabilize prices. Though high prices are good for the farmers, 
there's bound to be a correction, he said.

"There's an old saying out on the farm that the cure for high prices is high 
prices."