Ready for some happy-happy joy-joy news from the media? Food prices are on the rise, and it’s thanks to global climate change. And as is typical with these stories, the poor are affected most. Here are three paragraphs from the article outlining the upswing in prices:
The U.S. is wrestling with the worst food inflation in 17 years, and analysts expect new data due on Wednesday to show it’s getting worse. That’s putting the squeeze on poor families and forcing bakeries, bagel shops and delis to explain price increases to their customers.
U.S. food prices rose 4 percent in 2007, compared with an average 2.5 percent annual rise for the last 15 years, according to the U.S. Department of Agriculture. And the agency says 2008 could be worse, with a rise of as much as 4.5 percent.
Higher prices for food and energy are again expected to play a leading role in pushing the government’s consumer price index higher for March.
The increase in energy costs is easy to explain. With oil past $100 a barrel, gas and diesel prices also rise, and this translates into increasing food costs. But what’s up with the food price increase?
Still, the higher U.S. prices seem eye-popping after years of low inflation. Eggs cost 25 percent more in February than they did a year ago, according to the USDA. Milk and other dairy products jumped 13 percent, chicken and other poultry nearly 7 percent.
USDA economist Ephraim Leibtag explained the jumps in a recent presentation to the Food Marketing Institute, starting with the factors everyone knows about: sharply higher commodity costs for wheat, corn, soybeans and milk, plus higher energy and transportation costs.
The other reasons are more complex. Rapid economic growth in China and India has increased demand for meat there, and exports of U.S. products, such as corn, have set records as the weak dollar has made them cheaper. That’s lowered the supply of corn available for sale in the U.S., raising prices here. Ethanol production has also diverted corn from dinner tables and into fuel tanks.
Soybean prices have gone up as farmers switched more of their acreage to corn. Drought in Australia has even affected the price of bread, as it led to tighter global wheat supplies.
We have increased demand as the rising population and affluence of nations fuels their desire for better food. After eating too many mystery meat curries or stir-fried rat dishes, I’m not surprised that India and China are clamoring for American meat. But increased demand from overseas isn’t sufficient to push up the prices by itself; we also have diminished grain supplies as arable land for food crops is being diverted to grow fodder for biofuels.
The New York Times recently printed an article about the increase in food costs because of the biofuels push:
The idea of turning farms into fuel plants seemed, for a time, like one of the answers to high global oil prices and supply worries. That strategy seemed to reach a high point last year when Congress mandated a fivefold increase in the use of biofuels.
But now a reaction is building against policies in the United States and Europe to promote ethanol and similar fuels, with political leaders from poor countries contending that these fuels are driving up food prices and starving poor people. Biofuels are fast becoming a new flash point in global diplomacy, putting pressure on Western politicians to reconsider their policies, even as they argue that biofuels are only one factor in the seemingly inexorable rise in food prices.
In some countries, the higher prices are leading to riots, political instability and growing worries about feeding the poorest people. Food riots contributed to the dismissal of Haiti’s prime minister last week, and leaders in some other countries are nervously trying to calm anxious consumers.
Ethanol supporters maintain that any increase caused by biofuels is relatively small and that energy costs and soaring demand for meat in developing countries have had a greater impact. “There’s no question that they are a factor, but they are really a smaller factor than other things that are driving up prices,” said Ron Litterer, an Iowa farmer who is president of the National Corn Growers Association.
He said biofuels were an “easy culprit to blame” because their popularity had grown so rapidly in the last two or three years.
Senator Charles E. Grassley, Republican of Iowa, called the recent criticism of ethanol by foreign officials “a big joke.” He questioned why they were not also blaming a drought in Australia that reduced the wheat crop and the growing demand for meat in China and India.
“You make ethanol out of corn,” he said. “I bet if I set a bushel of corn in front of any of those delegates, not one of them would eat it.”
You can also make animal feed, tortillas, polenta, cornbread, and the chips for dipping into a nice fresh salsa I like to make in the summer, so ethanol isn’t the only thing you make out of corn. As for the Senator’s comment about the delegates refusing to eat a bushel of corn placed before them, the majority of corn grown in the U.S. is the field or dent variety, which is not meant to be eaten fresh, but is ground into cornmeal after it is dried. The Senator from Iowa should know that. His comment is both silly and insulting.
We have rising food prices because of increased demand on the existing supply of grains, and a large demand comes from the people clamoring that we turn our corn into ethanol to replace gas. If you have a bushel of corn, you can choose either to turn it into food–tortillas, cornbread, animal feed–or into ethanol. You can’t use the same bushel twice. So increased demand for ethanol translates into less corn available for food consumption, which in turn means more expensive tortillas and corn-fed beef.
And now I get around to the title of my article. Fear of global climate change is prompting the calls for more biofuels, which is increasing the cost of food stocks like corn and anything else that uses corn, so global climate change is the cause of rising food prices.
When I hear the naysayers like former Vice President Al Gore moaning and wringing their hands over the over-hyped crisis of global climate change and how we need to change our lifestyle to save the planet, I didn’t realize that part of their proposed change would adversely punish the poor by jacking up the cost of the very food they need to live.
Frankly, I’d rather eat corn than burn it in my car.