“Continued expansion of biofuels production will likely maintain corn and soybean prices at historically high levels and livestock producers will adjust to the increase in feed costs by reducing production, leading to higher retail prices for beef and pork in the longer term,” Joseph Glauber told the Joint Economic Committee at a hearing investigating high food prices.
Corn prices are expected to rise again in 2008-09, Glauber said, adding that USDA will release an official forecast on May 9. “Demand is expected to remain strong, supported by expanding use for ethanol,” he said. Other crops and food products are also being affected by the ethanol boom, including wheat and baked goods, witnesses said.
“Wheat acreage continues to dwindle because farmers can make more money growing government subsidized fuel than they can grow food,” said Richard Reinwald, a baker from Huntington, N.Y., speaking for the Retailer Bakers of America. “Even with current record prices for flour, the response to grow wheat is greatly diminished because of mandates for ethanol production.”
