Rob:  In countries scattered around the globe, people are rioting about the price of food.  It’s an economic crisis many blame on bio fuels because of the recent shift to use our country’s corn supplies to make ethanol.  It’s a complex issue, and one that we examine today from several perspectives.  And we begin halfway around the world, in Cairo, Egypt.
Rob:  It’s early morning on the banks of the River Nile.  Traffic is flowing as morning prayer-calls awaken a sleeping city.  
(Sounds of prayers in the background.)
Rob:  Inside this Cairo bakery, work is already underway to bake their daily bread.  
Rob:  And this is balidi bread, a bread that’s made up of about 80 percent wheat flour, and 20 percent domestically grown corn; and it’s so popular here in Egypt, that when the government tried to raise its subsidized price, there were, literally, riots in the streets.
Rob:  For Egypt’s working poor, the cost of food has skyrocketed, in part because much of the wheat that goes into Egyptian bread is grown in the U S, wheat that has tripled in price in the last three years.
The consumer is affected with the bread, not with the wheat.  It doesn’t eat the wheat of the United States; it eats, the consumer eats the bread.
Rob:  Egyptian officials say overall inflation is running at 12 percent over last year, provoking social unrest that’s being reported in other developing countries as well.  The United Nations estimates world food prices are 50 percent higher, than just a year ago. 
Larry Sanders:  Well it’s very unusual, if you look at the 20th century there were probably only three times where we had a serious run-up in food prices.
Rob:  Economist Larry Sanders is a public policy specialist for Oklahoma State University, and says some basic economic principles account for the rise in food costs, including grain now being used for bio fuels. 
Larry Sanders:  The story is much more complex than that, it’s not only bio fuels, but it’s weather related, it’s energy sector related, and China is playing a big part in that as well.
Rob:  And I would have to believe that while the weather may change, the growth that we’re seeing in the developing world is something that this country needs to get used to.
Sanders:  You know, there is going to be fits and starts in that, but there’s no doubt that we do see the economic growth taking off in much of the developing world; China for sure; India for sure; some of the others are lagging behind, but they are coming along, so.  Yeah, with China and India, you probably have a third of the world’s population.
Rob:  That not only put a demand on food around the world, but also a demand on the energy that produces that food. 
Sanders:  Exactly, and because they are so intertwined, when the price of one goes up, the other does as well.  It’s going to continue that upward pressure for some time.
Bob Stallman:  Overseas, we’re looking at a simple equation of tight stocks not being able to keep pace with growing consumer demand in developing countries.
Rob:  At a Washington D C news conference, American Farm Bureau president, Bob Stallman, denied charges grain-based ethanol is to blame for the current rise in food prices. 
Stallman:  But, ethanol is not the culprit that American consumers are being led to believe.  Bio fuels are just a small factor in the many forces at play.
Rob:  Farm Bureau says without the use of ethanol, fuel prices would be even higher, about 15 percent according to Stallman.  And according to Farm Bureau, ethanol saves consumers about 50 cents a gallon.  But not everyone agrees.  Speaking to a group of Wall Street investors, the CEO of the large poultry firm, Tyson, says corn-based ethanol is the primary culprit of rising animal feed costs, and higher food prices. 
Dick Bond:  Higher food costs is one of the many unintended consequences of the corn-based ethanol mandates and subsidies the U S government put in place in 2007.  
Rob:  Bond says we can’t grow enough corn in this country to make a dent in our dependency on imported petroleum.  And in trying to use corn-based ethanol as our primary bio fuel source, we’re pushing the price of food higher and higher.
Dick Bond:  Ethanol mandates and subsidies, along with tariffs on ethanol imports, are causing a world food crisis.  Shortages and higher prices mean many people around the world are spending the majority or all of their income on food.  Those who can’t, are starving.
Rob:  Well, no one is starving back in Oklahoma, but those in the livestock industry are  feeling the pinch of higher feed costs.
Jason Hitch:  Our biggest problem is we’re price takers; we can’t pass our costs on to the next level, directly, so it’s pretty tough to recover those costs.  And driving the break-evens up in today’s market, with everything else going up is a hard sell.
Rob:   And Jason Hitch should know.  Family owned, Hitch Enterprises runs one of the nation’s largest feed yards, and says the high price of corn has changed the way they do business.
Jason Hitch:  Corn is hard to find in this area.  There’s so many places looking for corn, and so few acres of production that, we scramble pretty hard.
Rob:  Hitch says he believes it’s a bad idea to put energy needs before food, which is why his family in cooperation with Oklahoma’s Bio Energy Center is planting a thousand acres of switch grass, that he hopes can someday be used to make bio fuel, instead of corn. 
Jason Hitch:  it’s a low water usage crop, at least that’s the theory.  And it looks like it’s got some promising future in the ethanol industry, and it’s not based on grain.
Rob:  But for now, corn remains the primary source for bio fuels in this country, creating a dynamic of higher food costs, consumers may need to get used to.
Larry Sanders:  We may have high prices continue for another year to three years, but sooner or later those prices are going to take a dip.  There’s a truism that economists tend to state probably too much, but the cure for high prices is high prices.  So, at some point down the road, we’ll begin to see that we have enough surplus that it begins to drive prices down in the food sector.  And when that happens, we’ll be talking about the difficulty that producers are in, perhaps, rather than the difficulty that consumers are in right now.
Rob:  And to learn more about the impact of higher food costs on Oklahoma’s three-billion dollar cattle industry, just head to our web site and click on value added.