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Food prices are high, and so are Big Ag's profits

Posted at 10:29 AM on 30 Apr 2008

Food prices hitting you hard in the pocketbook? Agriculture giant Archer Daniels Midland feels for you, it really does -- but gee, its profits jumped 42 percent this quarter, so it can't really empathize. ADM's grain-processing division is doing lively business keeping up with the bumper corn crop. And, they'll have you know, high food prices are due to high oil prices, not to the ethanol push. Backing away from biofuels would be "foolish," "dangerous," and an "empty gesture," says ADM CEO Patricia Woertz, adding, "It won't fill anyone's stomach. It won't fill anyone's gas tank." It won't fill ADM's jones for profits, people. You wouldn't want that, would you?

sources: The Wall Street Journal, Associated Press, Reuters

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Comments: (6 comments)

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ADM is right

And, they'll have you know, high food prices are due to high oil prices, not to the ethanol push.

Objectively speaking, this is entirely correct. The UN says biofuels play a marginal role in the high costs of food (around 10%). High oil prices are by far the biggest factor. Then you have the other important drivers: increased demand from Asia, the weak dollar and speculation.

Backing away from biofuels would be "foolish," "dangerous," and an "empty gesture,"

According to the IEA - not your corporate greenwasher but the most rational energy think tank on the planet - says the same thing:

IEA warns against retreat on biofuels
By Carola Hoyos and Javier Blas in London
Published: April 25 2008 22:30 | Last updated: April 25 2008 22:30
Biofuel production is critical to meeting current and future fuel demand in spite of its possible role in driving up food prices, the west's energy watchdog has warned.

Biofuels have a deflationary effect on all other prices. They are critical to meet our energy needs. Without biofuels, there can only be worse times ahead (it's all pretty logical, but good of the IEA to come out.)

I appreciate Gristmill's attempts to poke fun at issues. But when people are right - even if they're big multinationals - it would be fair to say so.

by Jonas at 11:04 AM on 30 Apr 2008

What proof?

It's simple. Show me a net surplus of fuel from a county who's ag machines run on biofuels and I'll believe that biofuels will have a positive effect on reducing the consumption of petrol.

However, with increased ag production currently meaning an increase in diesel powered ag machines, I have a hard time swallowing the double talk that "biofuels aren't inflating prices... oil is." Isn't agriculture the number one user of fuel in the U.S.?

If you continue to do what you've always done you'll continue to get what you've always got. - Yogi Berra

by Matt at 12:01 PM on 30 Apr 2008

great post

The food price crisis is mostly from oil prices. I hope most of us know that by now.

Interesting that Exxon posted record profits of any corporation in US history the last two years in a row. Did anyone catch the Press Conference after the Valdez spill case finally made it to the Supreme Court, 19 years after the spill? One-fifth of the plaintiffs have already died!

As I've commercial fished in Prince William Sound and motored a 150 footer around Bligh Reef a number of times, I have an extra personal interest in seeing these guys get what's coming to them! Quite a shame though that the 5 billion in damages they've been appealing, once a year's profit for this Texas giant, is now only 3 weeks worth. It's not even 5 bil anymore...was cut to 2.5 by their appeal.

by greenfire8 at 1:45 PM on 30 Apr 2008

Biofuels Must Be Stopped

Despite the usual anti-environmental blather from Jonas and corporate lies and propaganda from ADM, biofuels are one of the major causes of the current global food crisis. A major official in the U.N. just asked that the General Assembly vote to place a moratorium on biofuels for five years for this reason.

But there's another, more important reason to stop biofuel production. Tropical rainforests in Brazil, Indonesia, and Malaysia are being cut down to grow crops for biofuels. These ecosystems took over 200 million years to evolve and cannot be replaced in any way. Saving tropical rainforests is far more important than all of the supposed benefits of biofuels put together, though many of those benefits are complete fabrications.

by Wolverine at 9:51 AM on 01 May 2008

Antitrust

I wouldn't have a problem with Exxon or the big agribusinesses making record profits if they weren't heavily subsidized with taxpayer money, which disables competition in energy and food markets and is due to strong lobbyists instead of what's best for the public and what's constitutional.

My blog about Christian Environmental Ethics - www.jesusandtheorangutan.wordpress.com

by ccdangelo at 8:29 PM on 01 May 2008

Food to Fuel Won't Work

Jack Daniels figured it out a long time ago, if you are going to make ethanol you filter it through charcoal and put in an oak barrel for a while and sell it for $100 a gallon.

They have been doing this in Lynchburg for over 100 years now without receiving a $10 billion plus taxpayer subsidy.

Read http://www.earthpolicy.org/Updates/2008/Update69.htm

Cheers.

by roncastle at 9:34 AM on 02 May 2008

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