Public Policy Chairman
Colorado Corn Growers Association
The Grocery Manufacturers Association (GMA) is waging an aggressive campaign to convince Americans that biofuels are driving painful increases in food prices. The claim is not true. But it provides a nice cover for food companies as they report record profits.
The GMA lobbies Congress. Its mission is simple. Keep regulations low and profits high. And this is no piker group. Executive Director C Manly Moipus has a $4.7 million salary. The Washington lobbyist is Scott Faber, another hefty paycheck.
Americans suspect the worst of lobbyists, although most of us are unaware of the details. Lobbyists do much more than skate the marble halls of Congress in Gucci loafers, make campaign contributions, and ask favors for clients. They engage high-powered public relations and advertising firms to shape public opinion so they can claim support for the positions most favorable to their clients.
We got an inside look at this confidence game recently when the GMA plan to blame biofuels for high food prices was leaked to the public. The plan objectives: “obliterate whatever intellectual justification might exist for corn-based ethanol among policy elites, and then, “demonstrate there is a political price… Congress must be made to feel the political risk.”
A memorandum detailed how phony research, media flacks and congressional arm twisters would play a 3 card Monte on consumers and Congress.
A temporary spike in corn prices gave these pirates an opening to drive a multi-million dollar public relations campaign to mislead the public. Recently the price of corn dropped in half, but food prices are still increasing. The charade was exposed. They now will need a new angle to attack biofuels, and find it they certainly will.
There are a number of reasons why food costs are high and why biofuels are not connected to the high price of our groceries.
Biofuels are made from field corn, a grain humans do not eat in its raw state. We eat sweet corn. About 99 percent of all corn acres in the United States are used to grow field corn. In 2007 only 1.3 percent of the corn crop was used for cereals. All other food uses required only eight percent of the crop.
The United States Department of Agriculture calculates the actual cost of food in the product on the shelf averages 19 cents of every dollar. The corn in a $4 box of corn flakes represents a far lower percentage, only 8 cents. Food processing, packaging, transportation and retailing cost about $3 and rest is profit for the food companies.
Globally, we have more food per person than ever in all of human history. The problem is not scarcity, it is political unrest, lack of infrastructure and capital in countries where food is needed.
The demand for corn in the livestock and poultry sector has been relatively flat in the last 10 years while the amount of corn produced increases each year. American corn producers continue to be the world’s top exporter of corn.
When raw field corn goes into a processing plant to make a biofuel, such as ethanol, the biofuel is only one product of many. Every bushel of corn yields 18 pounds of distiller’s grains, a good source of protein for livestock and poultry. In some processing methods a bushel of corn will produce 2.8 gallons of ethanol and 13.5 pounds of corn gluten feed, corn oil used in food processing, and 2.6 pounds of high protein livestock feed.
The honest approach is food companies admitting record profits and be as accountable to consumers as they are to their stockholders. Don’t count on it.