(Grand Island Independent) -- As food and gas prices go up, a battle continues to rage between those who blame ethanol development for higher food costs and those who blame higher energy costs. A recent analysis by economist Tom Elam, Ph.D., president of Farm Econ. for the American Meat Institute, found that U.S. ethanol policy is continuing to drive meat and poultry prices higher. Elam said he expects food price inflation to rise 5-6% in 2009. He estimates the cumulative costs to the food industry of the federal renewable fuel requirement and tax incentives will be about $100 billion from 2005 to 2010. Elam said that as a result of the program, this year's swine input costs are up $2.9 billion; cattle input costs are up $2.24 billion; and dairy producer input costs are up $2.7 billion. But Terry Francl, senior economist American Farm Bureau Federation, said high crude oil prices are a contributor to today's high crop and food prices. "Too often, corn and ethanol demand are blamed for high food prices overall," said Ron Litterer, president of the National Corn Growers Association (NCGA). A recent study by the Federal Reserve Bank of Kansas City said that the marketing cost of food, along with rising labor and energy costs, are the key driver of food expenses. Francl said that among the major factors influencing the prices of key U.S. crops and the foods derived from them are investors' growing interest in commodity-focused funds, rising world demand, years of declining stocks of essential crops and the falling value of the U.S. dollar.
