Americans Believe Higher Oil Prices, Increasing Worldwide Demand for Food Major Causes of Higher U.S. Food Prices

Few Cite Increased Ethanol Production as a Factor

Washington, D.C. (Oct. 29, 2007) – According to a new national poll set for full release tomorrow, Americans believe that higher oil prices, increasing demand for beef, pork, chicken and other food items in China and other parts of the world, and drought are the main reasons behind the increasing price of food. One of the least cited causes was the increased use of ethanol.

The poll found that 46 percent of Americans believe rising oil prices is the number one cause of increasing food costs, followed by 15 percent citing increasing global demand. By contrast, just 7 percent of respondents believe increased ethanol production is the most important cause.

“Despite the smoke and mirrors campaign to scapegoat ethanol production for raising food prices, Americans fully understand the real reasons they are being squeezed in the aisles,” said Renewable Fuels Association President Bob Dinneen. “Skyrocketing oil prices, increasing global demand, and drought have a much greater impact on the price Americans are being forced to pay in the grocery aisle than increasing ethanol production. Considering that 81 percent of every food dollar spent pays for the processing, packaging, transporting and marketing of food items, it’s painfully clear these energy-intensive activities are the root cause of higher food prices.”

As Bruce Babcock, professor at Iowa State University, told Diane Rehm of National Public Radio recently:

“I did a couple of calculations [and] crude oil prices are up about 60% over the last two years, gasoline prices [are] up 50% [and] diesel [is] up more than 50% and if you look at the share of the retail food dollar accounted for by energy prices relative to commodity prices, I think that energy prices would probably have a greater share – so if you actually increase energy prices by 50% or 60% that’s going to have a bigger impact on the price of food than higher commodity prices.” [Transcript of “The Diane Rehm Show,” http://wamu.org/programs/dr/07/10/02.php#13742]

The poll, conducted by The Mellman Group and commissioned by the RFA, found that 84 percent of Americans believe something other than ethanol is the chief cause for food price increases. Specifically, the poll asked respondents to choose which factor had a greater impact on food prices from a menu of choices. The results, including what respondents believe to be the second most influential factor are as follows:

Cause of Higher Food Prices:                                               Rank of Importance: 

                                                                                      1st       2nd

Higher oil prices........................                                             46        18

Increased global demand for food from
nations like China.............                                                       15        23

Poor weather conditions such as drought in Europe,
Australia and other parts of the world...............                        14        22

Food companies raising prices to increase profits .......               9          12

Increased ethanol production ......................................             7          9

All of the above.....................                                                   4          7

None of the above .................                                                  3          4

Don’t know ...........................                                                  3          4

(Margin of Error: +/- 3.1%)

Recently, ethanol critics have sought to pin the blame for rising food prices on the growth of the domestic U.S. ethanol industry. Just today, an Internet poll sponsored by food processing giant Hormel claims that “when prompted,” 60 percent of Americans blame ethanol for the increase in consumer food prices.

The Mellman poll, conducted October 23-25, surveyed 1000 adults with a margin of error of +/- 3.1%. Complete results of the poll, including a measurement of public support for renewable fuels like ethanol, will be released tomorrow.

Source: RFA

Bookmark/Search this post with:

 •    •    •    •    •    •    •    •    •    •