Perfect Storm

Many factors grow food costs

By ERIN HIPPLE — Express Staff Writer
LOCK HAVEN — While many believe increasing food costs in Pennsylvania are directly related to the increase in ethanol production, the Pennsylvania Farm Bureau would disagree.

According to Carl Shaffer, president of the Pennsylvania Farm Bureau, based in Camp Hill, there are an array of factors contributing to the ever-growing cost of food. These factors include high fuel costs, weather-related issues such as drought, an increasing worldwide demand for food, a reduction in food stocks, an increase in biofuel production and the instability found in the financial markets, Shaffer said during a stop at The Express on Tuesday.

One of the main reasons ethanol fuel was introduced and cities mandated its use several years ago was because of its beneficial environmental impact, said Shaffer. “But you don’t hear them talk about the environment anymore. Now ethanol fuel is just an easy blame target for people when speaking of the rising cost of food.”

Shaffer went on to say ethanol fuel actually benefits consumers, saving approximately $50 billion a year.

“Studies have shown that oil and gas prices would be 10 or 15 percent higher if ethanol production was not increasing,” said Shaffer. “When the study (by Iowa State University) was conducted, gas was at $3.50 a gallon with ethanol and without the ethanol gas would have been about $4.02 per gallon.”

The PFB also believes ethanol has a large environmental benefit.

According to a report by the American Farm Bureau Federation, ethanol reduces carbon dioxide emissions by 29 percent, lowers tailpipe carbon monoxide emissions up to 30 percent and lowers tailpipe fine particulate matter emissions by 50 percent.

Shaffer also said the belief that when food prices increase, the extra money goes directly to the farmer, is not true.

“Most of the retail food dollar is not going to the farmers,” he said.

Shaffer said the costs off the farm, based upon $1, equal approximately 81 cents, while the farmers and ranchers receive only 19 cents out of the $1. In 1980, farmers were receiving 31 cents per dollar, he said.

The off-farm expenses include processing, packaging, wholesaling, distributing, transporting and retailing food products.

“The expenses on the farm are much higher than ever,” said Shaffer.

“The chemicals, the feed, the transportation and diesel for utilizing farm equipment have gone way up.

“With the value of the dollar dropping and droughts in places like Australia, which caused a food shortage, it was just a ‘perfect storm’ for people blaming ethanol on the rising food prices, when that is not the case.”