The cost of food is rising and those who can least affect it will be most affected: the poor. And it's worse in Tennessee because we have the highest food sales tax in the nation. Because food taxes are a percentage of food cost, the higher the cost, the higher the tax.
Before prices began to increase, a family with $15,000 left after taxes, spent 20 percent of its budget on food, according to the Bureau of Labor Statistics. For those taking home $100,000 or more, it's is just four percent.
Higher prices mean those percentages will increase, making it markedly more difficult for poor families.
How high have prices risen? CBS Marketplace says:
- Butter prices are up 31%
- Cheddar cheese prices, up 65%
- Nonfat dry milk prices, up 117%
- Broiler chickens, up 17.5%
- Beef, select, up 12.8%
"The price of milk is up at least 3 percent across the nation, and has risen a whopping 30 percent in California, where food prices are the highest in the nation," says ABC. "Ground beef prices are also up close to 3 percent."
The blame for all this partially falls on higher energy prices, but mostly it's because of the price of corn. It's not that we're eating more Doritos. It's because we're using more corn to create ethanol to blend with gasoline.
The journal Foreign Affairs says the problem is global and explains it saying:
Now, thanks to a combination of high oil prices and even more generous government subsidies, corn-based ethanol has become the rage. There were 110 ethanol refineries in operation in the United States at the end of 2006, according to the Renewable Fuels Association. Many were being expanded, and another 73 were under construction. When these projects are completed, by the end of 2008, the United States' ethanol production capacity will reach an estimated 11.4 billion gallons per year. In his latest State of the Union address, President George W. Bush called on the country to produce 35 billion gallons of renewable fuel a year by 2017, nearly five times the level currently mandated.
The push for ethanol and other biofuels has spawned an industry that depends on billions of dollars of taxpayer subsidies, and not only in the United States. In 2005, global ethanol production was 9.66 billion gallons, of which Brazil produced 45.2 percent (from sugar cane) and the United States 44.5 percent (from corn). Global production of biodiesel (most of it in Europe), made from oilseeds, was almost one billion gallons.
The industry's growth has meant that a larger and larger share of corn production is being used to feed the huge mills that produce ethanol. According to some estimates, ethanol plants will burn up to half of U.S. domestic corn supplies within a few years. Ethanol demand will bring 2007 inventories of corn to their lowest levels since 1995 (a drought year), even though 2006 yielded the third-largest corn crop on record. Iowa may soon become a net corn importer.
So if ethanol reduces our demand for oil, that's a good thing, right? Not necessarily. Says the Chicago Sun-Times, "For corn ethanol to completely displace gasoline consumption in this country, we would need to appropriate all U.S. cropland, turn it completely over to corn-ethanol production, and then find 20 percent more land for cultivation on top of that."
What if we just blend ethanol with gasoline as we do now. The Sun Times answers that, too.
According to a 2005 report issued by the Agriculture Department, corn ethanol costs an average of $2.53 to produce, or several times what it costs to produce a gallon of gasoline. Without the subsidies, costs would be higher still. A study last fall from the International Institute for Sustainable Development found that ethanol subsidies amount to $1.05-$1.38 per gallon, or 42 percent to 55 percent of ethanol's wholesale market price.
And what about pollution. Would ethanol help that? The Sun Times says:
A review of the literature by Australian academic Robert Niven found that, when evaporative emissions are taken into account, E10 (fuel that's 10 percent ethanol and 90 percent gasoline, the standard mix) increases emissions of total hydrocarbons, nonmethane organic compounds, and air toxics compared to conventional gasoline. The result is greater concentrations of photochemical smog and toxic compounds.
So why the rush to ethanol? It's good politics. Especially in an election year. Demand for ethanol raises corn prices and, as we've seen, that raises other food prices. Those are good things in Iowa where corn is king and presidential elections come early.
So while our leaders are playing politics, the costs of food for the poor increases. More so in Tennessee than about anywhere else because of our high sales taxes.
Clearly we need a better energy policy, but in Tennessee, we also need a better food policy and to realize that sales taxes aren't equal and fair to everyone.
Especially if you're poor.
- Jim Grinstead
This is sort of my area of technical expertise. The bottom line is that renewable sources of carbon-based energy is a stop gap measure at best.
First and foremost, the per capita btu consumption rate must be dramatically reduced. It is unlikely to meet our necessary goals by reucing these rates.
It is an uncomfortable reality that world population must be reduced. No I am not proposing some kind of mass murder, just more robust voluntary birth control via birth control rates of 1.5 or less.
Finally, we need to subtitute non-carbon energy sources. Sorry but wind and solar energy will only get you so far. So increased nuclear power will be a part of any solution for the next century or two, probably longer.
Posted by: Catfish | December 21, 2007 at 10:12 AM
How come you "progressive," i.e., statist sorts aren't blaming George W. Bush for the "worldwide" increase in food prices? Better judgement gettin' to you?
That said, I addressed the cost-of-food-is-rising issue in November 2006. I said:
"Tyson Foods, the world's largest meat processor, is warning investors and consumers that rising corn prices are leading to increased retail prices for chicken, beef and pork.
"Now, the whole meat product-increase situation has got me to thinkin'; and I have a few questions for anyone who cares to answer 'em for me. To wit:
"How come I can't find a poll in which 20 percent of Americans blame the Bush Administration for the rising cost of meat? (A Gallup poll conducted over the summer indicated that 20 percent of the voting public blamed President Bush for high gas prices.)
"When should we expect congressional hearings seeking to expose nefarious price-gouging schemes initiated by the meat industry's corporate honchos?
"When will Senator Harry "Sleepin' at the Ritz" Reid and Representative Nancy "Madame Moonbat" Pelosi flout common sense and suggest that America should dip into its "Strategic Meat Reserve" ... ?
"All kidding aside, the spike in prices for meat products, due to increased corn prices, is no different from this past summer's spike in gasoline prices, which was caused by a worldwide increase in the price of oil. Americans may not (don't) know it, but they are receiving a valuable tutorial in basic economics: growing demand, coupled with supply pressure, will increase the cost of goods and services."
In the United States, the jump in prices for meat, dairy, and a whole host of prepared foods (such as those made with corn syrup) can, for the most part, be blamed on one particular thing: Ethanol. It has become more profitable for farmers - due to subsidies supported by "Green" Democrats and farm state Republicans who should know better - to grow corn for ethanol than for livestock feed and assorted food additives.
What can "progressives" do about the increasing cost of food? First, you can stop trying to conjure up the ghosts of Karl Marx, William Jennings Bryant, Harold Ickes, Sr., John Kenneth Galbraith, and Bernie Sanders (oops, he ain't dead yet!). Those sombitches never offered a single substantive idea to cure shortages or tame inflation. Second, you can contact every federal elected official and tell them to STOP ETHANOL SUBSIDIES NOW!
Progressives of the World ... unite, er, just do it!
(This comment will be posted at http://nighseencreeder.blogspot.com on December 22.)
Posted by: Joltin' Django | December 21, 2007 at 10:35 PM