Late last month, Tyson CEO and President Dick Bond paid a visit to Shelbyville and said some pretty interesting things about the cost of food and ethanol production.
"I can rant and rave about this for some time, but some of the things that our government in Washington has done in terms of mandating the use of corn-based ethanol ... it's not right," said Bond.
Corn has gone from $2.50 a bushel up to $5.40 this week, Bond said, and this price jump "hasn't even impacted the consumer yet."
"Chicken prices are up only three or four percent and will have to be up like 20 to 25 percent as we go forward. We already have high fuel prices, now we're going to have higher prices on protein, cereals or any wheat products ... all the commodities will jump dramatically," Bond said.
We thought this was an important story and passed this up the line to the Associated Press. After all, this is the head of nation's largest meat producer saying that a government mandate was going to cause drastic hikes in the price of food.
But no one picked up the story. The AP seemingly ignored it.
But this week, the problem is getting a lot of notice in international press arenas and here as well. For example:
In America, the federal government pushes the production of ethanol from corn with a rich mix of tax incentives and protectionism. Refiners get a 51-cent tax credit for every gallon of ethanol they produce and are shielded from cheaper imported ethanol with a 54-cent-a-gallon tariff.
The result, totally by design, is that a huge swath of the U.S. corn crop that would otherwise go to food for people and animals is diverted to ethanol.
The National Corn Growers Association says 2.3 billion bushels of corn, or nearly a fifth of U.S. production, went into ethanol in 2007. That's up 28% in just one year. It also is 18% of U.S. corn production, a percentage that is bound to soar.
Aside from the impact in this country, take a look what this does overseas. This isn't about the price of a bag of Doritos going up anymore: The rising costs of basic commodities have made even staple food more expensive. In the Third World, that means people who could afford the basics like bread and rice now find them beyond their means.
"The reality is that people are dying already," said Jacques Diouf, of the UN's Food and Agriculture Organization (FAO). "Naturally people won't be sitting dying of starvation, they will react," he said.
The UN says it takes 232kg of corn to fill a 50-litre car tank with ethanol. That is enough to feed a child for a year. Last week, the UN predicted "massacres" unless the biofuel policy is halted.
Of course, if you listen this guy, we need to, once again, make sacrifices to offset a totally boneheaded government mandate.
From this morning all sellers of transport fuel in the United Kingdom will be obliged to mix it with ethanol or biodiesel made from crops. The World Bank points out that "the grain required to fill the tank of a sports utility vehicle with ethanol ... could feed one person for a year". This year global stockpiles of cereals will decline by around 53m tonnes; this gives you a rough idea of the size of the hunger gap. The production of biofuels will consume almost 100m tonnes, which suggests that they are directly responsible for the current crisis.
On these pages yesterday Ruth Kelly, the secretary of state for transport, promised that "if we need to adjust policy in the light of new evidence, we will". What new evidence does she require? In the midst of a global humanitarian crisis, we have just become legally obliged to use food as fuel. It is a crime against humanity, in which every driver in this country has been forced to participate.
But I have been saying this for four years, and I am boring myself. Of course we must demand that our governments scrap the rules that turn grain into the fastest food of all. But there is a bigger reason for global hunger, which is attracting less attention only because it has been there for longer. While 100m tonnes of food will be diverted this year to feed cars, 760m tonnes will be snatched from the mouths of humans to feed animals - which could cover the global food deficit 14 times. If you care about hunger, eat less meat.
Riiiight. Have you ever noticed that every "crisis" has the same solution: A changed or reduced lifestyle for Americans and the West? It always seems that if people get fat, it's America's fault due to our lifestyle. If they starve, it's also our fault.
The only good thing about a global food crisis is the media can finally quit whinning about how obese everyone is.
Now, not all of the world's starvation is being caused by this biofuel flap. Places like North Korea and Zimbabwe both had starving citizens before this ethanol craziness hit, and yet no one is blaming the corrupt leadership in these countries for their part in this mess. Especially North Korea. I mean, how bad can your country be if you have to escape to China? More times than not, in every instance we send "aid" to these places, all it does is prop up some tinhorn despot who hates our guts and continues to starve their own people, as they arm their own thugs. Crop failures are also a big factor.
But I'm surprised that the foreign ministers of some of these Asian and African countries haven't indirectly blamed the food shortage and increased prices on Al Gore's "global warming" hysteria, which many say has lead to us putting food in our fuel tanks. Some are already pointing fingers.
Folks, right now the rain forests in South America are being converted to sugar cane for fuel, our corn resources are now diverted to ethanol even though we have plenty of oil already existing in the ground in a useable form -- we don't have to use our food resources to create fuel.
But we can't drill because it might upset the habitat of the caribou or the polar bear. Instead, we are using corn to fill our gas tanks while the rest of the world starves.
Something is very, very wrong with this picture.