The food price blame game
Tactic No. 1: Create a straw man.
Nobody in their right mind can claim that corn ethanol has no impact on corn prices, or that corn prices have no impact on food prices. You can only debate the extent of the corn’s impact. Here’s a conclusion from a study released this year [PDF] that supports all previous studies:
A system of five equations representing the U.S. corn market is estimated by 3SLS. Results show that increasing ethanol production has a significant impact on the national average U.S. corn price. The positive price change is consistent with previous research.
You can trust this study because the researchers are from a university agriculture department and were obviously hoping for a different conclusion. The concluding
remark straw man:
However, in contrast to what is written in much of the popular press, results do not suggest the extremely high corn prices in spring of 2007 can be completely attributed to ethanol.
Try to find a popular press article that ever claimed that “the extremely high corn prices in spring of 2007 can be completely attributed to ethanol.” Use of this straw man argument has become standard operating procedure for biofuel proponents. If putting one-third of our corn crop into our gas tanks has no impact on food prices, then by extrapolation, putting all of it into our gas tanks will also have no impact because zero multiplied by any number equals … zero.
Tactic No. 2: Blame oil. The price of corn is following the price of oil, therefore the high price of corn is the result of the high price of oil.
Is the price of corn really following the price of oil? Speculative bubbles drove the recent spike for both, and the recent declines were the result of those bubbles popping along with all of the other bubbles that have been popping. The average prices per year since 2005 (the year the Renewable Fuels Standard was put in place) of corn and retail gasoline tell a different story:
2005: Corn = $2.04, Gasoline = $2.31 (Bu of corn 12 percent lower than gal of gas)
2006: Corn = $2.36, Gasoline = $2.62 (Bu of corn 10 percent lower than gal of gas)
2007: Corn = $3.41, Gasoline = $2.84 (Bu of corn 20 percent higher than gal of gas)
2008: Corn = $4.80, Gasoline = $3.46 (Bu of corn 39 percent higher than gal of gas)
All you can argue about is why the average price of corn has been growing so much faster than the average price of oil, especially when you consider that only 25 percent of a farmer’s costs are oil related.
Tactic No. 3: Conflate the term corn export with corn surplus.
By definition, any customer who lives outside our borders who buys our corn must have it “exported” to them. Selling corn to someone outside our border is the same as selling it to someone inside our border, except the term export is replaced with shipment. An expert explanation can be found here (spoof warning).
Tactic No. 4: Blame the food producers:
Fending off criticism that they fear could jeopardize ethanol subsidies, Ohio corn growers shot back at corporate food producers yesterday, saying they continue to charge high prices and reap big profits even as corn prices plunge.
Wait a minute, when did farmers stop being food producers? Truth be told, the blame does not fall on the farmer or the grocer; it falls squarely our politicians, and in no uncertain terms, we need to let them know it.