Rosie, Paris Move Over; Corn’s the New Media Darling (5-25-07)

By Rick Tolman
NCGA Chief Executive Officer

Like most of us, I get a lot of my news from TV. I consider myself pretty well informed. Thanks to TV news, I know that Paris might have to go to jail a week earlier. Thanks to TV news, I know all about the controversy between Rosie and Elisabeth on “The View.” And thanks to TV news, corn has become the unwelcomed media darling.

You’ve seen the ethanol/food price doomsday scenario reports. This week CNN and Good Morning America took their swipes. Yep, playing their favorite game of finding a villain to blame, the media has set its sights on corn. By propping up unachievable scenarios, academic exercises and using unnamed experts, they have gone to work doing what they do so well, creating notoriety.

Last week a group made up of livestock organizations, food retailers and grain trade groups released a report that they commissioned from Iowa State’s CARD group. The paper had several scenarios and resulting impacts, but the groups who commissioned the survey pushed out mostly the worst case--30 billion gallons of ethanol capacity in five years.

Thirty billion gallons by 2012 is ridiculous and can only be reached by the magic of the academic assumption that waives reality. For some perspective, the ethanol industry produced 5 billion gallons last year and will perhaps reach 8 billion gallons by the end of this year. The National Corn Growers Association analysis is that because of logistical and market constraints, we will be hard pressed to reach 15 billion gallons by 2015. But, plug that 30-billion gallon number into that econometric model and make the right assumptions and bingo--a doomsday for food and feed prices. Plug in 15 billion gallons in 2015 and surprise, surprise, the model reports virtually no impact on food and feed prices or the livestock industry. But, which scenario would you headline if you were competing with Paris and Rosie?

TV news and reporting have apparently changed and I missed a turn somewhere. Facts, details, objectivity seemingly have been pushed aside by sensationalism, speculation, entertainment and sound bites. As Ted Koppel said, “People shouldn't expect the mass media to do investigative stories. That job belongs to the 'fringe' media.”

Let’s look at something you don’t commonly see on TV news. . .analysis of numbers. The chart below shows Bureau of Labor Statistics food prices for April of 2005, 2006 and 2007 for a basket of products where corn is a key input. The respective price of corn for those same time periods was: April 2005: $1.94; April 2006: $2.18; April 2007: $3.36.

The table below shows the 12-month period in 1995-96 (the last time corn prices were in the range they are now) and contrasts that with the prices of key food items over the same time period. “High Food Prices – Blame Corn?” You be the judge.

What is very apparent is the rise in corn prices has had little if any impact on retail food prices and history and economics tell me they won’t. But, I guess a close look at the numbers isn’t sexy.

A few weeks ago USDA released its baseline study and analysis for U.S. agriculture. That report indicated little or no impact on retail food prices due to the increase in ethanol demand. In the Rosie and Paris era, not surprisingly, that got virtually no play and nor any media pick up. If it ain’t sexy, it don’t sell. Headlines, sound bites, Rosie and Paris and food scares.

Where’s the remote?