The industry leaders held a phone press conference on Thursday, the day after corn hit a record high of almost $8 per bushel. Corn prices, already high, shot up again after estimates of damage from floods that have ravaged
Each of the executives, and their respective industry segments, has publicly given their support to Texas Gov. Rick Perry. Perry has filed a waiver with the Environmental Protection Agency (EPA) to reduce the ethanol mandate in the face of rising food prices. The EPA is considering the request and its public comment period ends on June 23.
Media reports on Thursday estimated at 1.3 million acres of corn and up to 2 million acres of soybeans have been lost to the floods, the worst in the region since 1993. The U.S. Department of Agriculture will say how big this year's U.S. corn crop will be later in June, but the department has hinted it will do a special assessment of how many acres have been lost to massive flooding that struck the Midwest.
Markets have already reacted with corn for December delivery rising as high as $7.85 a bushel on the Chicago Board of Trade before easing back to settle at $7.80, up 4 cents. In the most-actively traded July contract, prices rose to $7.50 a bushel before falling back to settle 4 cents higher at $7.4625.
Beef, pork, chicken and turkey producers have all seen the costs of livestock raising double in the past year have been working to reduce herd and flock size to save money. Rod Brenneman, president and CEO of Seaboard Foods in
Paul Hill, chairman of West Liberty Foods, said the current situation is a “perfect storm” of very high demand, both domestically and internationally, low stockpiles and natural disaster sharply reducing the corn supply available.
“This corn ethanol (program) was designed to be stop gap to get us through (a corn price slump),” he said. “It wasn’t totally thought through. We need a total comprehensive energy policy in this country that we have to force on elected officials.”
Thomas Elam of
“We understand corn won’t go back to $2 per bushel,” said Mark Hickman of Peco Foods in
Richard Wiles, chairman of the Environmental Working Group, said food prices could rise another 9 percent in the fourth quarter of 2008 or first quarter of 2009 as the reductions of livestock work through the system.
The press conference was the latest call by the meat industry to reduce the pressure on the national corn crop from use in ethanol.
Earlier this month, a coalition of meat processors, retailers, environmental groups, industry associations and Hispanic groups began Food Before Fuel. The goal of the coalition is persuade the EPA to lower its ethanol mandate in the face if rising global food prices. The organization has been very vocal in its support of Perry’s waiver request, hosting a petition on its Web site at www.foodb4fuel.com.
“We have to eat before we drive,” said Hill.