Certainly not an unbiased observer, the United States Department of Agriculture (USDA) has issued an economic analysis that reveals that crops grown for biofuels (in the U.S., that means mostly soybeans for biodiesel and corn for ethanol) are not responsible for the recent increase in food prices. In fact, the USDA found that just about anything but biofuels are to blame: high energy prices, increasing global demand, drought and other factors are all called "primary drivers" of the increased food costs. The National Biodiesel Board liked what it heard, and has put out a statement saying that the USDA analysis "affirms wisdom of U.S. biofuels policy" (read it after the jump). The USDA's food and fuel website is here. Last month, the Grocery Manufacturers Association issued a statement that claimed just the opposite of what the USDA is saying, and we all know that this debate has gone on for a long while. There is little reason to believe the USDA will have the last word. Who's up next?


Press Release:

USDA Shows High Oil Prices, Other Factors Drive up Food Prices

Affirms Wisdom of U.S. Biofuels Policy

WASHINGTON, May 20 /PRNewswire/ -- The U.S. Department of Agriculture released economic analysis that shows high energy prices, increasing global demand, drought and other factors -- not biofuels -- are the primary drivers of higher food costs. During a briefing on the case for food and fuel yesterday, U.S. Agriculture Secretary Ed Schafer pointed to the fact that oil prices have broken through a series of price ceilings this year.

"Developing diversity in our portfolio of fuels is if anything an even more urgent matter than it has been in the past. And it is one that remains central to our energy security and our national security," Schafer said. "The policy choices we have made on biofuels will deliver long-term benefits."

Schafer pointed to International Energy Agency data that show global biofuels production has cut consumption of crude oil by 1 million barrels a day, offering savings of $120 million dollars a day.

The National Biodiesel Board praised the Secretary for speaking out on the recent attacks on biofuels. "There has been a feeding frenzy on biofuels as the reason for higher food prices, and those accusations are unfounded," said Joe Jobe, CEO of the NBB. "It is encouraging to see USDA documenting some of the real reasons for increased food prices. The American public is being duped on this issue."

Last week, Sen. Charles Grassley (R-IA) released a plan by the Grocery Manufacturers Association to discredit biofuels, calling their attempts to blame biofuels for food price increases "outrageous and misplaced." He blasted the plan as an "effort to undermine and denigrate the patriotic achievement of America's farmers to reduce our dependence on foreign oil while also providing safe and affordable food."

USDA has posted economic analysis and charts (http://www.usda.gov/) that document that "even with the current uptick in food price inflation, it is much lower than it was in the 1970s and early 1980."

Schafer criticized efforts to repeal biofuels policy but urged the focus to stay on long-term solutions. He pointed to the benefits of work to increase global agricultural productivity, which is important to developing countries food and energy needs. "The need for food and fuel is only going to grow," Schafer said.

The NBB is the national trade association of the biodiesel industry and is the coordinating body for biodiesel research and development in the U.S. Its membership is comprised of biodiesel producers, state, national, and international feedstock and feedstock processor organizations, fuel marketers and distributors, and technology providers.

For more details on biodiesel, visit http://www.biodiesel.org/.

[Source: National Biodiesel Board]

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