Ally,

Is that Jim Martin that you quoted a Bush appointee? I notice that he serves (probably at the pleasure of Bush) on a federal advisory body.

Unfortunately, Jim Martin is wrong to point at the dollar. Yes, the dollar has exerted pressure on inflation, across the board, but, food has increased in price at a rate that is not similar to that across the board inflation.

I live in farm country. This is what Jim Martin did not explain to you:

Ethanol should not be made from corn. There are better materials to make ethanol from without robbing our nation and world of food supply.

The futures on corn primarily shot up BECAUSE of the run on corn for ethanol. When this happened, last spring, many wheat, rice and soybean farmers immediately stopped raising wheat or legumes and started planting corn.

As long ago as last summer, the increase in price of corn, exclusively, was felt in many poorer countries like Mexico. Wheat and legumes had not inflated yet but corn inflated immediately due to ethanol, creating hunger as early as last summer.

This created a shortage of commodities like wheat, rice and soybeans - causing the prices of these foods to also eventually rise, later in the year, when it became apparent to the "market" that fewer supplies of these would be available.

It's true that there was a surplus of corn last fall but EVEN MORE fields will be planted in corn this year than last year and even less wheat and legumes will be planted. Why was there a surplus of corn? Because not all the corn ethanol plants are completed and running at full efficiency.

Why didn't the surplus of corn bring the cost of corn down? It wasn't because of beef. It was because the cost of corn is decided many months in advance of any known surplus because costs (prices) of hot commodities are determined in Chicago and New York through the "futures market." The prices are locked in by the speculators way in advance. And, the speculators locked in high prices.

Many more ethanol plants are being created this year, next year, etc. More and more corn is expected to be grown and to impact food supply by reducing other commodities and driving up costs.

Here's the problem - we should NOT be using corn (or any other food supply) to create ethanol.

Ethanol can be made from refuse - like wheat straw and other materials. Ethanol should be made from non-food materials so that we do not upset the world's food supply and the dinner table of those less fortunate than our own - just because we want to take an easy route.

Making food from fuel is wrong. Period.

Ladies,

I'll also speak from the farmer's point of view since I am one. I'm one of those growers that switched from wheat to corn because the price of corn futures went up. Even though my family has a bigger bank account, now, we know that making ethanol from corn is wrong.

The people that have developed and are building the "corn ethanol" plants don't worry themselves about inflation or the food supplies of the middle class or poor in this country, much less on the other side of the world. Making ethanol from corn is wrong because - well, frankly, it drives up the costs of other food like wheat, beef and milk and creates shortage of commodities. Ethanol should be made from non-food materials, as Lola points out.

Ally, with all due respect, when you hear that "corn ethanol" is driving up the cost of food - you really should believe that this chain reaction is real.

It's not a slam against biofuels, per se. It's not. It's only a recognition that one specific biofuel is wrong - "corn ethanol." Other forms of ethanol would do just as well and wouldn't create food cost inflation. The problem is "corn ethanol" and not "ethanol" in general. "Ethanol" is good, "Corn Ethanol" is not.

I am both a wheat and corn producer. I live and breathe this stuff. I have more money in my pocket this year due to corn ethanol - but it doesn't make it right. In fact, my wife and I have decided that our atonement for our new "wealth" will only come from telling the truth: Corn Ethanol is Wrong.

Jerry & Elizabeth Jacobs

No matter how this food crisis got created, we need to solve it because hundreds of thousands of human beings are starving to death. That number could reach the millions. Looking at whatever everybody has written here (including Ally who had the smartest first points) and - assuming all of us are - to some degree, correct - here are our combined solutions:

1) Stop making ethanol from corn to alleviate demand (price) on corn and encourage growers to produce more wheat, rice and legumes, as well as corn for food.

2) Start immediately making ethanol from agricultural refuse rather than food products (all new ethanol plants should be fitted for refuse products not corn products)

3) End the war in Iraq to at least begin stopping the budgetary crisis and pressure on the U.S. dollar

4) Continue with the Democratic Party control of Congress and elect a Democrat to the White House to ensure that we continue with the PAYGO (pay as you go) budgetary procedures that Democrats believe in

5) Raise taxes on the wealthy to reduce our national debt - which is the primary reason why our dollar is devalued.

Its true - Jim was in fact a Bush administration appointee and I think he told me he was a life-long democrat as well.

But you're right also about the weakening dollar. He never came right out and said that but I agree. With China buying up half our assets, our gas coming from the middle east, and our trade policies out of step - we can blame Bush - and to a certain extent Bill Clinton's NAFTA and CAFTA policies as well as the so called "blue dog democrats" who continue to vote for these dangerous trade policies.

So I kinda think you're all right.

To Lola - I think that we are on the horizon of having other products to use as a source for biofuels. I bet wheat will be next but we had a bad wheat and winter wheat crop a few years ago and are just now starting to make up the difference. That's why wheat and rice are much more expensive than corn is right now.

Also - look at the link I put in the last paragraph for "corn is the only biofuel" - its a whole story about how Brazil uses sugar and lots of it, as a successful alternative to fuel and have little to no emissions. They use sugar because its what they grow - we use corn cause its what we've got.

I also heard, but couldn't find the article, about a giant pig farm in Tulsa I think, that uses the pig fat and makes it into biofuels so their trucks run completely on bio-diesel made of the same pig-fat of the pork they are shipping. Now I guess they are going through the process of also converting their factory to run on it too!

I think the day that we can start using the biomass from our sewer treatment plants to also run energy in our homes is the day we'll become the most energy efficient.

Allie thank you for bringing this discussion to EverydayCitizen. It's an important discussion. Lola I think that your suggested solutions make sense and are all immediately doable.

We need to use wheat straw for biofuel. Wheat "straw" is what is left over after you take out the wheat. So using "straw" will not take any food out of the food supply at all. I am completely against using wheat kernels in biofuel. Using wheat kernels in biofuel production would be as bad as using corn kernels.

We need to stay away from all food products and use "refuse" only (throwaway materials only) like the "straw" that goes unused after wheat is harvested.

Here are some other resources

Wheat Unstable (Feb 2008 NYTimes)

"Prices have been gyrating in recent days as traders tried to figure out what to make of the situation. On Tuesday, prices for a sought-after variety, spring wheat, jumped to $16.73 a bushel on the Minneapolis Grain Exchange, the latest of several records."

According to Bloomberg they were at $9 a bushel Sept 2007. This was nearly an $8 increase in just 6 months.

By March, it had tripled in 10 months.

Last month there were mobs racing to get rice for fear of a shortage. The NYTimes says Rice "has almost doubled on international markets in the last three months."

It also says, "Since January, thousands of troops have been deployed in Pakistan to guard trucks carrying wheat and flour. Protests have erupted in Indonesia over soybean shortages, and China has put price controls on cooking oil, grain, meat, milk and eggs."

Rice went from being $580 a tonne to $760 in just a few weeks in March and April (The Star)

Here is a slide from the PDF I also link to above

According to this against wheat and rice and oil - corn is still the cheapest.

btw I am also against using the food parts to make fuel, but i think in terms of science and technology we need to go through these processes first to better develop our technology where we don't use fuel.

I'll be back in a few hours I'm going to see Indiana Jones!! (imagine me singing the theme here :) )

Allie you are right in noting the increases of wheat prices. That's the whole point.

The reason that wheat has increased in price is because of corn ethanol.

Less wheat is being grown because fields are being cultivated for corn that used to be cultivated for wheat. This creates a wheat shortage and drives up the price of wheat.

However, while the price of wheat has risen and is directly causing people to starve and go hungry - the rise in wheat prices has not been as great as the rise in corn prices.

Consequently, growers are still turning even more fields from wheat into corn, thereby causing wheat to become even more scarce.

The problem is - corn ethanol.

Allie you should talk to more farmers.

Enlightened progressives know that we cannot use food to create fuels. Not all alternative fuels are equal. Not all biofuels are equal. The only bad biofuels are those that are made from food. I don't believe that they will ever make ethanol from any other grain, Allie. They won't make it from wheat. Maybe they'll use wheat straw (which is not food) but I doubt they will ever use wheat. The Republican corporate world jumped with both feet into the "corn ethanol" debaucle. It's time for progressive and enlightened Democrats to tell those greedy billionaires that it's not fair to the middle class and the poor in the U.S. and the developing nations for fuel to be made from food. I believe that most Democrats realize that corn ethanol was a mistake but we won't be able to stop it until Democrats regain power in the government.

By the way, the cost of wheat cannot be compared to the cost of corn to get a handle on this. You need to compare not their cost per bushel - but they history of futures prices, and more significantly, their rate of futures prices increases. You will readily see that the corn futures have risen at a much higher rate than any other grain which then pressured the wheat/beef/milk prices up for all the reasons of input costs and cultivation/growing substitutions.

The farmers that I spoke to who are growing wheat are happy because they are making tons of cash.. None of the farmers I interviewed for the story grow corn - thats why I didn't include it in the story

I don't have much problem with what is said here, except the implicit opinion that it is still a good idea to burn food for fuel as long as it is only a minor part of the reason for food price increases.

Biofuels should come only from waste biomass - there should be no subsidies for bioethanol or biodiesel from foodstocks.

The weak dollar is a major factor in commodity price increases by virtue of increasing demand for our exported production.

My primary economic concern right now is inflation - not recession - as a consequence of current Federal Bank policy.

J.P. Michaud

The devalued US dollar accounts, in part, to the higher input costs on farms, such as the higher input cost of diesel.

However, the devalued US dollar does not account for the inflated food costs in places such as Zimbabwe, Thailand, Brazil and Mexico. Those countries, theoretically, should be paying less for American food this year than they did last year, if the US Dollar is the only cause of inflated food price.

The reason that wheat and rice cost more is because less wheat and rice have been grown so that more corn can be grown for the inflated market of futures in estimated corn required by the ethanol business.

I agree with what Dr. Michaud wrote in his comment, above, that food should never be used for the manufacture of fuel.

Jerry Jacobs

I agree with Pam that Ally deserves a thanks for starting this lively conversation. Thanks Ally!

The Farm Bill and commodity prices are taking a tremendous hit by those who do not understand what the farmer/producer receives for their production.

Well over 50% of the Farm Bill expenditures are for food subsidies and distribution to the poor.

$8.00 dollar per bushel farm price for wheat accounts for less than 15¢ in the price of a loaf of bread. I don't do the shopping in our household, but I'm sure that dropping the price of wheat back to $4.00 (which is below cost of production) wouldn't make a noticable difference in the price of bread.

The price of corn has very little to do with retail cost of any food, except meat.

Energy costs and the value of the U.S. dollar has more to do with the final cost of your food than the farm gate price of commodities. Political regimes have more to do with availability and distribution of food than what the U.S. farmer gets for commodities.