There is a large amount of misinformation and half-truths being circulated that implies agriculture, biofuels and rising commodity markets are responsible for the increase in food prices domestically, and for food shortages globally. As a central-Kentucky corn, soybean and wheat grower, and as president of the Kentucky Soybean Association, I feel it's time to make the public aware of the facts.
The Grocery Manufacturers Association and the American Petroleum Institute have begun a multi-million dollar campaign to target agriculture as the primary reason for increased food prices. Nothing could be further from the truth.
One of the major causes of food price hikes can be linked to the ever-growing cost of crude oil and fuel. Transportation costs have sky-rocketed, not to mention those of packaging, which are largely petroleum-based. Food processors pass these costs on to all of us.
The facts are many:
Of the 170 million acres of field corn and soybeans we grow, only 9% actually enters the food supply directly. The overwhelming majority of these crops are used for livestock feed, renewable fuel or exports.
Of every dollar that goes to retail food, only 19¢ goes back to the farmer. That leaves 81¢ that goes to packaging, wholesaling, distributing, transporting and retailing of food products. According to USDA, in 1980, farmers received 31¢ of every dollar. Twenty-eight years later, we as farmers are making substantially less from the retail food market.
The biofuels industry is also falsely accused in this campaign. It is characterized as inefficient and taking food from hungry people. In reality, the data used to make these accusations is from a long-outdated study. While biofuels will never completely replace oil as a source of fuel, it has displaced some of our dependence on oil and it has provided us cleaner burning fuels — helping our environment.
According to Merrill Lynch, current fuel prices would be 15% higher if it were not for biofuels in our marketplace. Add 15% to today's price for gasoline and that translates to about 60¢ more for each gallon. And remember, the corn and soybeans used to make these fuels are not directly consumed by humans.
Aaron Reding, Kentucky Soybean Association president and soybean producer from Nelson County.