Where's the Food?Written by Dennis Sun
Published: 14 July 2008
I read on the Internet where Russia, Vietnam and Argentina have decided to limit exports of rice, wheat and other grains to try to stop the runaway food inflation in their countries. As we all know, if you hoard something the price will just go up and maybe even initiate panic buying.
In the last year American corn has jumped 73 percent, the price of a contract for soybeans has risen 65 percent and wheat is costing around 123 percent more. From the popcorn in the neighborhood theatre to your bagel or pancake in the morning, rising food costs are a reality.
Here in Wyoming we all know the story of corn and ethanol and the associated impacts on our livestock producers. It’s great if you’re selling corn, but feeding it is a real heartburn. I never could understand the reasoning behind this ethanol craze. What was our government thinking? To produce our President’s goal of 35 billion gallons a year of ethanol with corn, we would have to grow corn on an additional 129,000 square miles. That’s about the size of Kansas and Iowa combined.
In Wyoming there aren’t too many cars sold that run on the 85 percent ethanol and 15 percent gasoline mixture, making it difficult to find a pump that sells it. So we get hammered on both sides. I’m glad I haven’t invested any money in corn ethanol plant stock, as they’ve been flat. The truth of the matter is corn-based ethanol is a problem, practically, morally and environmentally and I don’t think it’s a good investment. But it has made corn a good investment for now.
If you think food prices hurt your pocketbook here in Wyoming, try living in a developing country. In China, for example, overall food prices were up over 23 percent from a year ago. They said the price of pork rose 63 percent, vegetables 46 percent and cooking oil rose 41 percent. That is a huge increase for anyone to absorb.
And so here we are in America with a cheap dollar making it easy for other countries to buy from us. Our trade agreements seem to favor other countries, making our food cost that much more. Buying corn from America is a lot cheaper than buying it from other countries, making it harder to find corn for our ethanol plants, and that, in turn, raises the price of corn for both livestock and human use. It’s just like oil - supply and demand rule the markets. When you produce less than the demand you’re in trouble. If you think religion produces a terrible war, think what a country of hungry people could do.