Colorado Corn

Ethanol critics are engaged in a “false debate” over biofuels and should be asking how U.S. farmers can meet energy needs, rather than whether they should, Agriculture Secretary Tom Vilsack said.

“We’re trapped in a debate that leads us down the road of shortchanging American agriculture, rather than recognizing its enormous capabilities,” Vilsack said today at the annual meeting of the North American Agricultural Journalists in Washington. Proper investment can help farmers meet export, food, fuel, feed and fiber needs, he said.

The amount of corn used for ethanol will be a record 5 billion bushels in the year ending Sept. 30, the USDA said on April 8, up from 4.95 billion estimated a month earlier. Corn futures have more than doubled in the past year in Chicago because of rising demand. Industry groups representing Tyson Foods Inc. (TSN), Smithfield Foods Inc. (SFD) and other meatpackers have called for reduced federal support for biofuels, citing its effect on feed costs.

Corn is the biggest U.S. crop, valued at $66.7 billion in 2010. Wheat ranks fourth at $13 billion, behind soybeans and hay. The increase in ethanol production will slow as the amount of the biofuel that can be blended into conventional motor fuel reaches a limit and as federal ethanol-use requirements plateau, USDA Chief Economist Joe Glauber said yesterday.

Global food prices reached a record in February and pared gains in March, according to the United Nations. High food costs and corruption have spurred unrest across the Middle East and northern Africa that has ousted leaders in Tunisia and Egypt, the world’s biggest wheat importer. The U.S. is the largest exporter of the grain, along with corn and soybeans.