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Ethanol and Food Crisis Blown Out of Proportion
(posted May 9)
The Indiana State Department of Agricultural wants to get the message out
that "we are not running out of corn." Deb Abbott, the department's
public information officer, said the issue of a food shortage due to ethanol
has no rational basis.
"The world supply of corn is still greater than the demand,"
she said. Last year, the US had nine percent of its corn in reserves, even
though that is down from its normal range of 20 percent. The excess corn
is stored in elevators around the country. Innovative techniques have increased
corn production by four times with less acreage required than in the past.
Although Speedway is an urban area removed from the agri-business, people
still feel the pinch of higher food prices at the grocery store. Abbott
said there is a sense of frustration that ethanol is taking the blame for
higher food prices.
"An objective analysis determined that ethanol merely contributed
to a 0.25 percent increase in US food prices. The bigger culprits in higher
food and corn prices are increased demand for food from growing countries
like China, the impact of higher fuel prices on food transportation, and
a weakened dollar."
Media coverage of pork farmers losing money is more of a market issue that
needs to be worked out. The increase in feed for livestock has reduced
their profit margins forcing some to leave the business. She explained
the market goes in cycles and now is a good time to be a grain farmer.
"It has done this before," she said.
Abbott does not deny that "ethanol has its issue," but the goal
is to displace 10 percent of the foreign fuel used in the US, meaning $35
billion is staying in the country.
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