By KEVIN WALKER
Michigan Correspondent

LANSING, Mich. — The Michigan Farm Bureau (MFB) is so worried about the perception that higher food prices are the result of corn-based ethanol that it’s produced a Food Resource Guide to get its message out to reporters as well as its own members.
The guide provides a rundown of the farmer’s limited share of the retail food dollar, current market prices versus futures contracts, farmers’ rising input costs and related food topics.
“There’s been a good deal of interest from the general public and media about rising food costs, and part of the reason for disseminating this information is to help the media paint a fair, balanced picture of that very complicated issue, and to help clarify some misinformation – like the ‘food versus fuel’ debates, which has some folks thinking ethanol production is making food more expensive, when the truth is a whole lot more complicated than that,” said Jeremy Nagel, a spokesman for the MFB.
Nagel said he doesn’t know why the mainstream media has focused so heavily on ethanol as the cause of higher food prices, but hopes this information will help set the record straight.
Some interesting morsels in the guide: Even if food prices increase another 4.5 percent this year, U.S. consumers will spend 19 percent less of their disposable income on food, compared to 1974.
According to the guide, too, “a Merrill Lynch commodity specialist recently interviewed by The Wall Street Journal pointed out that oil and gas prices would be about 15 percent higher than they are currently if it weren’t for ethanol production, and that the savings more than balances the limited role of higher corn prices on food price inflation.”
Ethanol has also been mentioned in the same discussions as the rising prices of several grains worldwide – including rice – so the MFB provided some talking points for this as well.
“In the last quarter-century, rice consumption has outpaced production, with global reserves plunging by half since 2000,” it states. “Consider, for instance, that a six-year drought decimated Australia’s rice production by 98 percent. The largest rice mill in the southern hemisphere had been located in Australia and had processed grain to meet the needs of 20 million people around the world, but closed in December 2007 due to the reduction in rice production.”
Michigan Department of Agriculture Director Don Koivisto also took up the subject of worldwide food prices in his most recent monthly column: “Two key factors impacting food costs are the growing middle class in Asia and Latin America, who are purchasing more meat and milk, driving up demand for feed; and the declining value of the U.S. dollar.”
Despite the protests from agriculture, ethanol continues to be singled out by many as the main culprit behind rising food prices. For example, late last month Sen. Kay Bailey Hutchison (R-Texas) authored a column called “Undoing America’s Ethanol Mistake,” in which she wrote that “in recent weeks the correlation between government biofuel mandates and rapidly rising food prices has become undeniable.”
She wrote that she would introduce legislation that would freeze the biofuel mandate at current levels instead of steadily increasing it through 2022. On the same day, Texas Gov. Rick Perry requested a waiver of the renewable fuel standard (RFS) which, if granted, would reduce or freeze the amount of ethanol being produced.
Renewable Fuels Assoc. President Bob Dineen shot back with the following: “Replacing the 4.5 billion gallons of fuel Governor Perry seeks to remove from the marketplace would come at great expense to Americans from all parts of the country. Given that America’s gasoline refiners continue to run their refineries at far below capacity and oil prices show no signs of abating, it rapidly becomes clear that removing this volume of ethanol would send gasoline and diesel prices far higher than we are seeing today.”
Michigan Corn Growers Assoc. Executive Director Jody Pollok expressed her displeasure over the coverage, as well as the political backlash that has occurred.
“From our standpoint, we’re just feeling very, very frustrated,” she said. “We call radio and TV stations to help them tell a balanced story, but a lot of people just don’t understand. We have 11,000 corn farmers in our state. That’s a lot of people benefiting the state’s economy.
“This feels like a battle that’s going to be ongoing.”