Colorado Corn

By Rick Tolman
Chief Executive Officer
National Corn Growers Association

When the U.S. Environmental Protection Agency turned down a request for a one-year cut in the renewable fuels standard on Aug. 7, we hoped it would silence the outspoken few who spread inaccurate and incomplete information on the issue. Unfortunately, within moments, they were out there talking their talk.

We believe farmers and food producers should be working together, not driving stakes in each other’s hearts. We also know that not everyone agrees on this issue and dissenters may never understand or accept the facts. Yet, we plug along trying to help people see the truth about corn supply, ethanol’s impact, and more.

First, our corn supply is plentiful enough to meet everyone’s needs. We are providing more corn for food and feed, and we even have corn left over at the end of the year. After the 2007 harvest, we met all needs and have more than 1.5 billion bushels left over. If all goes according to the current U.S. Department of Agriculture forecast, we will meet all needs and have more than a billion bushels left over after the 2008 harvest. And projections for when the renewable fuels standard reaches it maximum of 15 billion gallons of corn ethanol show that we also will be producing more than enough corn for food, feed and other uses – including ethanol production.

When you take into account the fact that ethanol production, as projected for 2008, will result in an additional one billion bushels of livestock feed, you find that ethanol itself will consume only about 22 percent of the 2008 corn supply while livestock feed will use 45 percent. That's a lot of corn that goes, ultimately, into food.

Our opponents also talk about the impact on wheat, and allege that wheat production is down, thanks to the renewable fuels standard. The truth: Ever since the RFS kicked in, wheat acreage has been on the increase, according to the USDA. In 2005, 57.23 million acres of wheat were planted. This year, the number is 63.46 million acres – the highest in 10 years.

We remain convinced that technology is an important tool for guaranteeing an adequate and consistent supply that meets all needs. It is the primary reason that corn yields have been on the rise since the mid-1990s.

When it comes to corn prices, consider this: The USDA’s average projected farm price of corn from the 2008 harvest dropped to $5.40 on Aug. 11, only weeks after corn futures neared $8. In fact, corn can be bought for less than $5 in some places. Even the price of a barrel of crude oil and a gallon of gasoline has gone down.

We live with a “new reality” today that is not the old reality we faced back in April when Big Food kicked off its assault on U.S. agriculture, or even back in June when some crops were underwater. Growers are resilient and have learned through the years how to roll with the punches “Mother Nature” and other challengers give them.

Corn prices are down and we doubt we will see two-dollar corn again. And even though corn prices are up, the cost of growing corn has risen steeply with this year’s huge gas price, fertilizer, and other input cost hikes – much of which is energy-related. We are all feeling the impact of high-priced oil.

And this problem crosses over into the food manufacturer’s realm also. After all, corn and other farm commodities only represent 20 cents on every dollar spent on food at retail. When you consider the cost of processing, packaging and transportation, one can see the huge impact of two other factors: labor and energy prices. Consider these two factoids:

Even at its higher cost, the amount of corn that goes into a box of corn flakes or a tub of movie-theater popcorn costs less than the paper box and tub that contain it.
Food travels, on average, 1,500 miles before it reaches a consumer’s plate. And that journey costs money.
Higher energy costs are something we all can tackle together for the good of everyone. Let’s move together and, to quote Nike, “just do it” – for the good of all. Then maybe food prices will come down, too.