Monday, March 10, 2008

Australians Riot Over Baked Beans; Ethanol and America Blamed

Heinz baked beans Australia Food vs Fuel corn ethanolAre the Aussies really rioting? No, but they should be madder than a "Joey on a hot Barbie" with mis-truths coming from the Australian media.

In this story from the Australian Broadcasting Corporation, America farmers and ethanol production are blamed completely for price increases in Australian baked beans, apparently a favourite of every Aussie:
Ethanol Blamed for Beans Hike - Monday, 03/03/2008

Heinz Australia says a five per cent increase in the price of baked beans is a result of ethanol production. The company buys all of its canning navy beans from North America, where the price has increased around 30 per cent in the past year alone. Farmers in the USA and Canada are planting fewer beans, in favour of corn production for ethanol, a sector which is heavily subsidised in America.
And the Sydney Morning Herald got it wrong too:
Bean plantings have fallen by almost half as US farmers cash in on corn prices which have jumped 200 percent thanks to the US Government subsidising ethanol as a petrol substitute.
But is that really true? No. Let's look at the facts rather than a press release from Heinz.

While planted acres did go down from 2006, it was only 20% and certainly not by the 50% claimed in the massive media reports. And the 2007 crop acres compared to 2005 was down just 6%. Interestingly, compared to 2004, the 2007 planted acres were UP 20%.

Navy Beans Planted Acres
2007 - 221,800 acres
2006 - 280,700 acres
2005 - 236,400 acres
2004 - 185,100 acres
2003 - 158,200 acres

There are many factors that affect planted acres not only in the United States but around the world. Prices are most impacted by marketing and energy production costs at food companies and world-wide demand spikes well after planting decisions.

So why would all cost increases be blamed of corn production?

As part of the Grocery Manufacturers Association (GMA), Heinz also has allegiance to minimize cost factors from the food manufacturers and shift them to others in the food chain, real or not. And the GMA is actively against corn-based ethanol, so one of their members blaming ALL cost increases only on ethanol isn't really a surprise.


A Big Shoutout to American Fuels for the tip-off!

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