Media misinterprets Collins' comments

By Anna Austin | July 08, 2008
Web exclusive posted July 17, 2008 at 2:57 p.m. CST

Weeks after former USDA chief economist Keith Collins was wrongly quoted by the mainstream media telling the EPA that ethanol production was responsible for a 30 percent rise in food costs, there is still confusion.

Collins was recently hired by Kraft Foods to analyze the relationship between biofuels and increased food and commodity prices. Kraft foods is a supporter of the Food Before Fuel campaign with the goal of convincing legislation to lower biofuel mandates. Collins submitted a report to the U.S. EPA on June 23, the last day of the public comment period on Texas Gov. Rick Perry's request for a renewable fuels standard (RFS) mandate waiver. He was later quoted by mainstream media saying ethanol production was responsible for 30 percent of the increase in food prices.

Mike Woolverton, grain marketing economist with Kansas State University research and extension, explained that Collins' comments were misinterpreted.

"He did say that food prices were impacted by ethanol production by using so much corn, but he said that of the 4.3 percent increase in food prices registered last year, 1.8 percent was due to ethanol production - which is in line with what the current administration has been saying, a 3 percent increase.' And so yes, ethanol has had an impact on food prices. There will be more impacts to come, but not the great impacts that many people think," Woolverton said.

In the paper, Collins wrote: "Thus, the increase in retail food prices due to biofuels is estimated to be 23-35 percent above the normal increase in food prices that would occur over 2-3 years." He also attributed the increases to other factors such as increased demand for U.S. commodities, the declining value of the dollar, reduced supplies of some crops due to adverse global weather, higher energy prices, and changing foreign agricultural policies.

"I think to reduce the mandate or eliminate it would give the wrong message to alternative energy producers," Woolverton said. "We're going to need alternative energy, in all its forms, not just biofuels, and I think we want to keep that initiative alive."