FAO's latest food price report good news for ethanol

FAO's latest food price report good news for ethanol

Growth Energy says information in food price update indicates world is capable of producing more food and fuel

As world food prices hit a near five-year low, dropping 1.5% last month according to the United Nations' Food and Agriculture Organization's most recent price report, Growth Energy said this is proof that " claims of ethanol increasing food prices do not hold any merit."

According to the FAO, the global food price has been on a downward path since April 2014. It tracks five major food commodity groups internationally: cereals, meat, dairy products, vegetable oils and sugar.

In the latest report comparing February 2015 to March 2015, sugar was down significantly, charting a 9.2% drop; vegetable oil a 3.1% drop; cereal and meat about a 1% drop; and dairy was the only gain, with a 1.7% increase.

Growth Energy says information in food price update indicates world is capable of producing more food and fuel

Tom Buis, CEO of Growth Energy, said the report shows the U.S. and other nations are "capable of producing increased quantities of food, feed, fiber and fuel."

He noted that global grain stocks increased between 2006-07 marketing year and the 2013-14 marketing year by 160 million metric tons, or 47%. Those dates correspond with the enactment of the Renewable Fuel Standard, he said.

The RFS is a policy that sets the amount of renewable fuels to be blended in the domestic fuel supplies.

Buis said global crop prices have strengthened also, helping farmers invest in new production practices that improve sustainability and productivity.

Related: USDA report: Farmers to plant more soybeans, less corn

"The U.S. RFS and other global renewable energy policies have played no small part in stimulating this agricultural resurgence both here and abroad," he said.

While corn trades at roughly the cost of production, and the FAO's report returns an overall lower trend for the Global Food Price Index, "any claim that says we cannot have both food and fuel is simply a self-serving charge aimed at driving a specific agenda with no factual merit."

Source: Growth Energy

TAGS: USDA Soybean
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