With corn prices in retreat, fuel vs. food debate loses heat

The Register-Guard (Eugene, Oregon)
By Deborah Jian Lee
The Associated Press
Published: Jan 11, 2009 09:17AM
Business: Home: Story

Question: Now that corn prices have plunged, is the ethanol industry still in the hot seat for driving up prices?

Answer: Just a few short months ago, when agricultural commodity prices reached their peaks, U.S. biofuel companies took the heat for a litany of woes: high food prices, world hunger and misplaced government spending. The corn-dependent industry faced blame from a diverse alliance of cattle ranchers, grocers and environmentalists.

From the spring through the summer of this year, the two sides sparred publicly in a food vs. fuel debate. As corn prices hit a record high of nearly $8 a bushel and consumers buckled under hefty grocery prices and a bleak economy, many pointed to the ethanol industry, buffeted by government subsidies and mandates for high production, as the primary culprit.

Corn prices, like most commodities, have plunged since the summer buying frenzy, falling from almost $8 in July to $4.25 in October. Ethanol production hasn’t eased up, and the industry is on target to meet its goal of churning out about 9 billion barrels of ethanol this year.

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