The Coming Food Price Spikes Could Have Been Avoided

"I've got corn plants that are as brown as you can imagine. There's nothing there."

Weld County, CO rancher Dave Eckhardt. who estimates some 400 acres of his 1400 acres of corn have been lost, quoted in The Denver Post ('High and Dry', p. 1K, Aug. 12).

Are Americans ready for a major food price spike next year? While the devastating drought has been estimated to ramp up food costs by perhaps 2.5- 3.5% this year, the bellweather will be next year when prices for hundreds of products - but especially meat and dairy - can be expected to increase 10-15%. How will this affect family budgets, especially of those still trying to recover from the recession or stuck in underemployment?

We don't know but one thing is for certain: If Mitt Romney and Paul Ryan get elected this November, and they cut the food stamps portion of the federal budget as much as they say, more than 100 million Americans will suffer. There can be no doubt, and hence living on maybe an allotted $260 a month (after their cuts) will be like living on $230 a month this year. As it is families on food stamps barely make it to the end of the month, and many have to frequent charity food banks. They hate it, hate having to depend on "handouts" but they've no other choice.

There are a number of factors that the pundits will tell you triggered this prospect. One, of course, is the prolonged drought affecting some 2/3 of the nation and nearly all of the corn farm belt. Another is the nearly total corn monoculture, basically farmers in the farm belt now excluding nearly all other crops other than corn. Why? Because many get more for the effort, especially with increasing global demand - from the Chinese especially - who are using U.S. corn feed to plump up their hogs.

Hence, as the pundits will put it, "the reason is simple and basic economics, you have very strong global demand, and a supply disruption from the drought".

This take, according to Stephen Koontz, and argicultural economist at Colorado state University. (D. Post, ibid.)

He added:

"For the consumer it means nothing but higher prices."

The other tragedy of this is, as he and other experts cited point out, once the higher prices take hold, they'll be almost impossible to reverse. Added to this is what many climatologists believe is projected drier and warmer conditions affecting all the farm belt in the coming decades. This translates into one thing only: an age of scarcity - that will send food prices ever higher.

Did all this have to transpire? Not really!

First, 40% of the total corn crop is still being used for ethanol production, and the government is subsidizing corn -to- ethanol producers at the rate of nearly 45 cents per gallon of ethanol so generated (The Senate voted to repeal said subsidy but the White House vowed not to repeal subsidies fully). This is egregious, in the sense of using a food crop for fuel and also because ethanol (as recent studies have shown) doesn't really signficantly impact the increase in greenhouse gases. Certainly not as much as building more fuel efficient vehicles.  According to The Denver Post piece:

"Corn growers and ethanol producers are resisting calls by livestock interests to temporarily waive the federal mandate that requires ethanol to be blended with gasoline".

Well, of course they'd resist with such fat subsidies coming their way! (And don't believe for a second that Repugs in corn-farming states, e.g. IA, also won't fight to keep ethanol subsidies for political capital! Hence, the Senate vote was more PR window dressing than political substance) Why not! But by shifting two- fifiths of a key grain crop (also in high global demand) to a lousy fuel substitute they not only spit in the face of the needy citizens of this country who won't be able to afford much higher food costs, but they also risk a world wide famine, since other crop collapses (e.g. wheat in Russia) have also been affected.

Indeed, this is why wheat - like corn - is priced at near record highs. But still wheat is nowhere as pervasive as corn in food manufacturing and livestock feeding. For example, in the case of the latter, high fructose corn syrup is siphoned off as part of the production process and used in all manner of foods across the board, from sodas, to cereals, to ice creams, to cans of pork n' beans. And it doesn't take a genius to discern this component can be an unhealthy addition and which more than one health source has pointed to majorly contrubuting to obesity in this country.

Second, let us note the health of any corn crop depends on the water available to farmers. Even in drought some farmers can still survive -as here in Colo. - because they can use irrigation. Indeed, 70% of the state's corn crop is irrigated, according to the Post article. But many farmers have lost out because they've been outbid at water auctions by the frackers and shale oil drillers. (This state like a couple others, allows the highest bidder at regular water auctions to win out). 

Thus, again, while precious water (up to 3 million gallons per well) is diverted to drilling, crops go dry.

Can this bullshit continue? Of course not! But it's one more sign our nation has lost its vision and political compass, along with extending never-ending tax cuts when we desperately need revenue.

What two things do I want to see?

1) A halt to all ethanol subsidies by the government. Let the corn farmers who produce ethanol do it on their own merits and openly compete with real alternate energy sources (geothermal, wind, solar) or not at all.

2) A halt to all water auctions in the state of Colorado, and instead prioritizing use according to priorities of human need and survival. Since one cannot live unless one eats, then this means water for crops must trump water used for fracking, shale oil drilling.

Until we come to our senses as a nation, we shall continue our long decline into history's dumpster.