Monday, July 14, 2008

Ethanol Industry Helps Rural Kansas Economy

Jere White Kansas Corn Growers Association ethanolThe following was a response by the Kansas Corn Growers Association's Jere White in response to a recent opinion piece in the Wichita Eagle by Seaboard Foods blaming corn ethanol for food price increases and demanding that Congress repeal the Renewable Fuels Standard.

Seaboard Foods' Rod Brenneman complained that the ethanol industry is strangling pork producers ("Ethanol mandate hurts livestock producers," July 6 Opinion). These are strange words from the executive of a company whose first quarter earnings were up 42 percent from the same quarter last year.

Brenneman is a leader in the Food Before Fuel coalition. The coalition is managed by Glover Park Group, the same East Coast public relations firm that is handling the Grocery Manufacturers Association's now infamous ethanol misinformation campaign. The goal of these two groups is simple: Get rid of ethanol so food companies can once again have access to cheap corn. Unfortunately for Seaboard and the other big food manufacturers, it isn't that simple.

Seaboard has been a good friend to corn growers over the years, especially when corn was priced below our cost of production. Writing his commentary from his corporate office in metropolitan Kansas City, Brenneman feigned concern for the small family pork producer.

Our office is located in rural Garnett. All four of our employees come from family farms -- both livestock and grain. We know that small livestock producers are struggling with higher corn prices, because those producers are our friends and neighbors, association members, and two of our four employees.

Several factors have contributed to higher corn prices. One factor is certainly ethanol, and we will gladly take some credit for that one.

The boom in ethanol came about when growers in Kansas and the Midwest, tired of selling their corn for less than $2 a bushel, decided to do something for themselves and their rural communities. Many growers and community members took a big chance, investing money in local ethanol plant projects to create a market for their crops, to create jobs and to increase revenue for their communities. I believe this is called rural development.

What about the other factors? The value of the U.S. dollar has dropped, and economies of many foreign countries, like China and India, have exploded. So the export market for corn and other grains has grown, increasing demand.

About the same time, investors and speculators, wary of the stock market, moved to investing in commodities, increasing volatility. Ever-increasing energy costs, thanks to our dependence on foreign oil, play the biggest role in the cost of food production.

It seems shortsighted for Seaboard, looking for lower production costs, to go after only ethanol -- a homegrown industry that is in many cases owned by family farmers.

Brenneman justified his position by stating that ethanol is the one factor that Congress can control and states that are "feeling the pinch" should speak up. He should remember that many of the ethanol plants in Kansas and other Midwest states are owned by family farmers, and those plants are providing jobs in those small rural communities. Hurting the ethanol industry will hurt our rural Kansas communities.

Brenneman stated that "there are real jobs, real people and real communities at risk here." We couldn't agree more."

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