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Ethanol falsely accused for higher food prices

The TV networks gave major coverage to the nation’s growing use of corn-based ethanol the week of April 30. The only problem, according to the National Corn Growers Association, was that much of the storyline was inaccurate.

Two of the networks — CBS and NBC — broadcast reports suggesting consumers are paying significantly more for their groceries today than they did one year ago. Why? Higher corn prices, according to CBS’ Cynthia Bowers and NBC’s Anne Thompson.

In a report that aired April 27, Bowers said, “Eggs are up 23 percent compared to a year ago and chicken prices as much as 27 percent,” as a result of increased demand and higher prices for corn. Bowers did not cite her source for the statistics, the NCGA said in a statement.

“If she’d talked to anyone at the U.S. Bureau of Labor Statistics, she would have learned that between March 2006 and March 2007, fresh chicken prices are up a measly 1.6 percent per pound,” the NCGA said. “While the price for a carton of one dozen large eggs is indeed higher than it was a year ago, the price in March 2007 averaged just one penny more than it did in March 2004.”

Bowers says $4 corn was to blame for the alleged food price increases, although corn futures prices have been trading under $4 for the last month and a half.

“The day the CBS story aired, corn was $3.64 per bushel on the futures market and considerably less in cash markets,” the Corn Growers said. “Furthermore, most livestock and poultry feeders buy their corn months in advance on long-term contracts. Thus, the corn being fed today was purchased for less than $3 per bushel six months ago or closer to $2 per bushel a year ago.”

Bowers omitted two other key facts regarding commodity price trends: (1) on the day the report aired, national average gasoline and diesel fuel prices jumped dramatically and reached their highest levels since the summer of 2006; and (2) transportation and energy costs figure prominently into the price a consumer pays for groceries.

“What we’ve sadly taken note of, however, is the increasing propensity of news programs to describe their programming as ‘balanced journalism,’ as they fail to check their facts and cite their sources,” the NCGA statement said.

NBC Nightly News called the National Corn Growers Association to talk about ethanol for its program and spoke with NCGA President Ken McCauley for nearly an hour. “Apparently they decided the facts weren’t what they were looking for after all.”

Over the weekend of May 5-6, Fox News commentator Steven Milloy cited last month’s reports of a computer model that claimed ethanol was a worse polluter than gasoline, without mentioning that the study had been discredited almost immediately.

“But the real winner in this heaping scoop of hogwash is ABC’s 20/20 and its correspondent John Stossel,” the Corn Growers said. “NCGA called the show’s producers offering to provide information, a spokesperson. They were polite. They listened. And they ran the most outrageous piece of the week.

“The title of the piece: ‘Sacrificing Our Children to the Corn Gods?’ As Stossel himself might say, ‘Gimme a break!’”

The Corn Growers said the reports might be laughable if millions of consumers didn’t tune into these “news” programs seeking factual information. “But good news doesn’t sell; fear does, as Stossel tells us in his book ‘Myths, Lies and Downright Stupidity’.

“We know that the scarier and more bizarre the story, the more likely it is that our bosses will give us more air time or a front-page slot. The scary story, justified or not, will get higher ratings and sell more papers. Fear sells. That’s the reason for the insiders’ joke about local newscasts: ‘If it bleeds, it leads.’”

The NCGA said that if Stossel really wants to cover a scary story, he should take a look at the May 4 new national high of $3.07 for a gallon of gasoline. “Scary? You bet,” it said.


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