NFU: Food prices cause for concern

By Susanne Retka Schill | January 12, 2009
Food prices remain high even though it's been months since commodity prices tumbled, prompting the National Farmers Union to call on Congress to reexamine the issues behind the high cost of food.

Congress first heard arguments on this matter in the spring of 2008 when higher commodity prices were being blamed for a spike in retail food prices, which some members of the media and special interest groups said was ethanol's fault. "It's clear that contrary to claims of food processors, retailers and others quick to criticize agriculture commodities, commodity prices have very little impact on the American consumers' cost of food," said NFU president Tom Buis. "It's equally clear that processors and retailers are pocketing the economic benefit of declining farm commodity prices and reduced energy costs without passing those savings on to the consumer."

A month after the NFU asked Congress to revisit the issue, NFU Director of Communications Liz Friedlander updated EPM on the status of its request. "The small business committee responded," she said. "It's on their agenda for the next Congress, and we're optimistic they'll take it up. We see this as a vehicle to set the record straight on the true causes of food price increases."

According to the Bureau of Labor Statistics, food prices increased 0.2 percent in November and 6 percent over the past year. Meanwhile, energy prices dropped 17 percent in November, and transportation costs fell 10 percent. "It's time Big Food stops acting like the Grinch and lowers its prices," said Greg Breukelman, spokesman for Growth Energy.

Meanwhile, a poll of 1,000 Americans, commissioned by the Food Before Fuel campaign and conducted by survey-based market research company Ipsos, concluded Nov. 18 that a majority of respondents—56 percent—wanted Congress to change its ethanol subsidy and mandate policies. However, Ipsos' Web site indicated the majority of respondents were "provided with information about USDA data showing corn ethanol production is the cause of 10 percent of food price inflation." Food Before Fuel didn't respond to requests from EPM to discuss the survey. "Ethanol has been on the government payroll for 30 years," said Joel Brandenberger, president of the National Turkey Federation, a member of Food Before Fuel. "After three decades of government policies subsidizing and supporting the ethanol industry, we find ourselves at the end of 2008 with more questions than ever before about the wisdom of this course."

In mid-December, Growth Energy said corn prices had fallen by more than 50 percent since the Grocery Manufacturers Association began its Food Before Fuel campaign against ethanol in July. Gas prices fell nearly 50 percent during that time.