While many Americans are enduring joblessness and struggling to feed themselves, forcing them to rely on food banks for help this year has been a good one for American farmers. Between the bad drought and rising demand for food in other countries, U.S. food producers have enjoyed record high prices for their crops. The booming market means that the federal government does not need to buy as many excess crops from farmers, resulting in a precipitous drop in government donations to food banks. It’s bad news for the hungry. The Capital Area Food Bank, the central supplier of food for more than 700 pantries and nonprofit groups that help DC's needy, has seen government food donations plummet 38 percent this year — about 1.5 million pounds of food. Blue Ridge Area Food Bank, which serves Loudoun County and central Virginia. It ran the budget numbers in the spring and decided it could not buy turkeys for Thanksgiving this year because of a 43 percent drop in U.S. Agriculture Department food and other donations.
For corn growers, the vast majority of their yields don’t even go to feeding people. About 40% of the corn crop gets turned into ethanol, and another 40% is used as animal feed, leaving only 20% for people to eat. Food crises overseas prompted the United Nations in August to call upon the U.S. to cease using so much of its corn for biofuels. Under the Renewable Fuel Standard, 13 billion gallons of biofuel must be produced in the U.S. this year as a way to reduce greenhouse gas emissions and dependence on imported oil. Critics of the fuel standard argue that the use of corn to make ethanol is a major factor in the tripling in the price of corn since 2005 and likely contributed to a food crisis in 2007-08.
Agriculture Secretary Tom Vilsack rejected this suggestion out of concern that to do so would cause higher gasoline prices and job cuts in ethanol production for Americans.
the overall economic effect in the U.S. will be muted because American households generally spend only about 13% of their budgets on food and because so little of what we pay at the supermarket is actually for food. For example, the corn in a $4.00 box of corn flakes is worth about 7 to 8 cents. Most of the price is for processing, transportation, advertising, and an oligopoly premium. The poor and near-poor, however, will feel the price rise at the grocery store far more acutely. It is in the developing world, where many people spend 30%-40% of their income on food, that the impact will be greatest. Jose Graziano da Silva, director general of the FAO, argued the ethanol quota should be suspended to allow more of the corn crop to be used for food production, especially in light of an FAO report that world food prices soared 6% in July, with the price of corn up 23%.
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For corn growers, the vast majority of their yields don’t even go to feeding people. About 40% of the corn crop gets turned into ethanol, and another 40% is used as animal feed, leaving only 20% for people to eat. Food crises overseas prompted the United Nations in August to call upon the U.S. to cease using so much of its corn for biofuels. Under the Renewable Fuel Standard, 13 billion gallons of biofuel must be produced in the U.S. this year as a way to reduce greenhouse gas emissions and dependence on imported oil. Critics of the fuel standard argue that the use of corn to make ethanol is a major factor in the tripling in the price of corn since 2005 and likely contributed to a food crisis in 2007-08.
Agriculture Secretary Tom Vilsack rejected this suggestion out of concern that to do so would cause higher gasoline prices and job cuts in ethanol production for Americans.
the overall economic effect in the U.S. will be muted because American households generally spend only about 13% of their budgets on food and because so little of what we pay at the supermarket is actually for food. For example, the corn in a $4.00 box of corn flakes is worth about 7 to 8 cents. Most of the price is for processing, transportation, advertising, and an oligopoly premium. The poor and near-poor, however, will feel the price rise at the grocery store far more acutely. It is in the developing world, where many people spend 30%-40% of their income on food, that the impact will be greatest. Jose Graziano da Silva, director general of the FAO, argued the ethanol quota should be suspended to allow more of the corn crop to be used for food production, especially in light of an FAO report that world food prices soared 6% in July, with the price of corn up 23%.
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