With corn prices rising to over five dollars a bushel, (a bushel is 56 pounds of corn) and the implication that high grain prices are causing food costs to soar, farmers have been defending their turf over the past year, with one powerful message in tow: Increased production of ethanol—thanks to the role corn plays—is not the reason food prices are rising.

Delivering this message to disbelievers has not been easy for those with a stake in farming. But like any urban rumor that takes on a life of its own, farming practitioners believe that with greater education and understanding of the farm process, consumers can better grasp the dynamics that link fluctuating grain costs with that of food.

For the past year or more, those with farming interests have had to answer to explain their role in the rising costs of food. One easy culprit to many is that as corn prices increase, farmers that pay a great deal more for corn and soy meal to feed livestock and chickens, must be passing these costs on to processors, distributors and retailers—or so the theory goes.

As a long-time farmer, Gerald Kopping wants people to know that when it comes to the rising cost of food, the "buck" stops here—at his farm gate. Kopping, who farms in Lemont and is a Farm Bureau board member, is adamant about declaring that the increased use of ethanol has little or no effect on his prices, and how he conducts business. And Kopping believes that other farmers with which he knows would exclaim the same thing.

"A lot of people that you talk to think you (as a farmer) are making more money than ever. Some guy I know asked me for a loan and I laughed," said Kopping, who farms on 500 acres, growing largely hay and corn, with 20 Angus beef head and 120 horses.

As food prices hit new levels, agriculturalists are certainly not making an economic haul. The farmer’s share of the average food dollar has been dropping over time. Statistics from the USDA show that in the 1970s, farmers received about one third of retail food expenditures, but currently they receive on average just about 22% of food expenditures.

In mid-April, Jim Sartwelle, an economist for the American Farm Bureau Federation, pinpointed the problem when he said that "when you look at the global run-up in energy prices, it costs considerably more for hauling, transporting, processing and packaging items than it ever has in the past. We’re seeing a lot of that reflected on the grocery store shelves right now."

Kopping said that farmers are a resilient group that—even in times when their market share has been falling—they still find ways to make a modest profit on what they sell while remaining solid citizens within the framework of the food chain. As ethanol producers use more and more corn to produce fuel, farmers have found ways to make do.

"Ethanol producers will process what they need for fuel and then resell the components they don’t need, like corn gluten, to farmers for animal feed," Kopping explains. "Some farmers open up small processing areas next to ethanol plants where they can quickly obtain feed inexpensively and then process it on site, once corn is processed for ethanol."

Kopping said that he regularly sources a portion of his animal feed from local microbreweries. "Once a brewery uses what they need from the grain to produce lager, I pick it up--often for free. Breweries could sell it dry, but many don’t want to go through that extra step of drying it if it can be taken away on the spot. It’s cheaper for them to get rid of it."

No doubt, education is a key to showing an uncertain public about the truth behind soaring food costs. The transportation of food from point A to point B and point B to point C is adding a significant cost layer as food is shipped to grocery stores—all thanks to rising fuels costs. Recently, diesel fuel has risen to above $4 a gallon—an unheard of price for what is a typically low-cost fuel.

On the education front, The Illinois Farm Bureau has put together information that helps crystallize the picture. IFB comments that blaming ethanol for food inflation is wrong for a few reasons, two of which are:

* The price of meat at the grocery store is not determined simply by adding feed costs to an animal. Farmers are price takers. Higher feed costs may simply stop at the farm gate in the form of lower margins for the farmer.

* In food products that contain corn, including corn fed to livestock, the price of corn is a fraction of the overall consumer price. The more processing involved in the product the less corn contributes to the overall cost.

Ironically, ethanol might be helping to hold back higher food costs. Ethanol is known as an economical transport fuel. As a result, food deliveries from vehicles that use ethanol or even biodiesel could help lower these higher transportation costs—and perhaps help hold back the price of food. So, less money spent on fuel means more disposable income in their pockets to spend on food.

The Bureau of Labor Statistics’ March 08 Consumer Price Index showed that food and beverage prices in March increased just 0.2 percent. The report did take note, however, of what it termed "another large increase" in the index for cereal and bakery products, but it pointed out that the increase "was partially offset" by a downturn in the price index for dairy products.

All of these facts might not be enough to convince people who have already made up their minds, thanks to the influence coming from the media and beyond. What can be done to enlighten people?

Kopping says that Farm Bureau, which has built a solid reputation on educating the public in areas like Ag Literacy and Ag in the Classroom programs, can continue to spread the word through its membership—even if it’s just in their neighborhood to people who have formed a misconception. For Kopping and his colleagues, it’s at least making some headway.

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