Ag chief disputes ethanol-food price link
ST. PAUL - Minnesota's agriculture commissioner says the country's grocery stores are misleading Americans when they claim that corn-based ethanol is driving up food prices.
"Some of this message is the result of calculated efforts from groups such as the Grocery Manufacturers Association," Commissioner Gene Hugoson said. "Sensing an opportunity to advance its agenda, this organization of food companies created a high-profile public relations campaign to mislead consumers into focusing on ethanol as the primary culprit behind rising food prices even though only 20 percent of the price grocery shoppers pay for a food item is due to the actual food cost and the rest is for non-farm costs such as advertising, packaging and transportation."
Ethanol helps the agriculture economy because it uses so much corn, and state leaders such as Hugoson and his boss, Gov. Tim Pawlenty, promote it as a way to help wean the country from foreign oil.
Hugoson said high corn prices are caused by, among other things, "record energy costs, increasing demand from Asian markets and speculative investing in commodities markets by large financial interests."
While today's ethanol mostly comes from corn, researchers are finding new ways to make the fuel that would not compete with foodstuffs like corn. That next generation of ethanol is a few years away.