No Correlation Between Corn Price and Food Costs

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Update? With no new news, the SkunK is maintaining his opinion we will hear about the GE CBE cash (ECCA) being freed up about the 4th of February. Here is my reasoning if you missed it the first time:
http://greenshift-gers.blogspot.com/2009/01/it-is-all-in-timing.html
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SkunK Harangue
The food vs fuel debate seems to the SkunK to be about the food processing industry wanting to go to the American Farmer and tell him how many pennies they will pay for his product. They do like the idea of a bunch of farmers forming an LLC, building a community Ethanol Plant and producing a value added product that competes with them for "THEIR" feedstock. Of course they do not say its all about them paying 4 cents for the corn in a box of corn flakes, rather than the 3 cents they would rather pay.

I do not have to tell you that a third of that corn returns as ethanol that cleans the air and stretches the gasoline supply. A third as CO2, that many plants today capture for that fizz in your soda or to inject deep underground to recover oil from spent fields. Hopefully in the future that CO2 will also be used to feed the algae in a Greenshift Bioreactor. Finally a third of the corn returns as a high quality animal feed product. A product that Greenshift can make even better by removing part of the INEDIBLE corn oil, raising the protein content and creating biodiesel.

Malarkey
Having been in a few third world countries I find it just hooey that some try to link ethanol production with hunger. UN warehouses are brimming with donated foodstuffs and people starve just miles away. Organized gangs/militias attack unarmed relief convoys and sell the food on the black market. Third world governments starve areas of their own county as a tool to weaken political opposition. Innocents starve, the ruthless advance their undemocratic agenda and the "civilized world" watches without a moral compass. So unwilling to judge between the innocent and those trying to kill them, the first world cannot muster even enough moral clarity to defend a convoy full of relief supplies on the way to starving victims. Starvation is a political, moral and logistic problem, it is rarely a supply problem. To say that anyone is starving because General Mills has to pay 4 cents rather than 3 cents for the corn to make a $3.00 box of corn flakes is, well, Malarkey.

Good old Days
Remember the Good o'l Days before Ethanol? The government used to pay farmers to rot their corn in huge storage bins all over the Midwest because of the lack of markets? The price of corn rarely was above the cost of production? Everyone looked at Soviet production numbers to see how much they would need to buy next year? Guess what? With all that excess production, more people were starving in more places all over the world - back in the Good o'l Days before ethanol.
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Wisconsin Ag Connection
December 23, 2008
WCGA: No Correlation Between Corn Price and Food Costs

Over much of the past year, the Wisconsin Corn Growers Association has been running an
aggressive campaign to educate the public that the price of corn is not what's driving up the
higher costs in the grocery store. And now that corn prices have fallen, the group is saying 'we
told you so.' WCGA President Randy Woodruff points out that over the past six months corn prices have plummeted by more than 50 percent, while food prices are up six percent for the year. The Bureau of Labor Statistics also confirms that energy costs fell 17 percent and transportation expenses dropped 10 percent in November.

"The truth is corn prices have almost no effect on grocery store prices, and apparently even the
impact of fuel costs is minimal," Woodruff said. "There are literally only pennies of farm value
in that goose, turkey or roast you will eat for Christmas dinner. And while corn growers and
consumers alike suffer the effects of a shaky U.S. economy some of this country's top food
companies continue to ring up record profits."

For example, an 18-ounce box of corn flakes today contains less than 4 cents worth of corn but
still costs as much, if not more, than it did last summer. Cereal giant Kellog's reported $342
million in net earnings, a 12 percent rise, while competitor General Mills reported $632 million
in operating profits this fall, a nine percent increase. Kraft Food's revenue rose 19 percent and
Campell's earnings rose a whopping 45 percent.

"These recent events make several things abundantly clear," says Woodruff. "First and foremost, there is no real correlation between the price of corn and the price of food at the grocery store. Additionally, the price of ethanol-blended fuels has little to do with food prices and finally, there is no scientific evidence that the rise of the ethanol industry is causing food shortages anywhere in the world."
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That's the way I see it,
SkunK