The Truth About Food Prices

It's an argument we've all heard - that ethanol is driving up food prices by stealing away corn and farmland for the production of fuel. Ethanol has been blamed over the past two years for everything from higher grocery bills to world hunger.

Here's why: about two years ago, the Grocery Manufacturers Association initiated a massive smear campaign against ethanol. (Read the document they sent to their PR agency.) It's been their goal since early 2007 to turn public opinion by placing the blame for high food prices specifically on our industry.

But they seem to have overlooked one gaping hole in their plan - the fact that ethanol actually has little to no effect on the price of food. We know this now because the price of corn for both food and fuel has dropped dramatically - while the price of food at the grocery store is the same. Grocery manufacturers are making record profits while Americans are hurting, and they're actively blaming it on ethanol. Ironically, ethanol has been saving money for both consumers and grocers by keeping the price of gas down.

Ethanol will soon be made from cellulose in plant material - like agricultural waste, wood chips, and native switchgrass that actually improves soil quality, helping sustainable agriculture. We're just a few years from mass-producing cellulosic ethanol, yet the plan set forth by the Grocery Manufacturers Association specifically aims to hamper its development, as well as that of all other biofuels. It makes us wonder what their actual motives are for targeting us.

But the question that all of us should be asking them is this: Now that you can't blame ethanol, what's the real reason food prices are so high?