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Vilsack: no correlation between food prices and ethanol

Vilsack pushes against claims that rising food prices and ethanol production are closely tied. Also says conservation programs not majorly affected by increasing grain acreage.

As food prices rise, Agriculture Secretary Tom Vilsack is not fond of claims that ethanol production is a major cause. He also says an uptick in grain prices will not have a big impact on conservation programs.  

“Ethanol production (doesn’t have) a significant impact and effect on food prices,” said Vilsack after touring an Iowa biofuel facility on Tuesday. “There’s a misconception in the public that ethanol is driving up food prices. That isn’t the case. In 2008, the last time we had an increase in food prices, we saw ethanol responsible for about 10 percent of the overall increase – a very small percentage.

“That’s reflected in the fact that farmers get only 16 cents out of every food dollar.”

For more on Vilsack’s Iowa tour, see Vilsack, Jackson on EPA regulations and myths.

 What’s responsible for the other 84 cents? “Energy costs, oil costs,” insisted Vilsack. “We ought to be looking at ways we can reduce our reliance on oil,” a commodity with extreme fluctuations in price.

Despite high corn prices, “we see interest in our CRP (Conservation Reserve Program) program. … It’s true we’ll have more corn acres. But it might be at the sacrifice of another commodity – maybe fewer bean acres, fewer wheat acres. … Overall, I don’t think we necessarily see a significant reduction in the amount of conservation activity. We’ll continue to promote conservation and have a proper balance.

“But, from my perspective, I don’t see the correlation between high food prices and ethanol production.”

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