Minnesota Farmers Union

(June 5, 2009) - Grain and livestock producers are not the only ones affected by the increase in crop prices that began in September 2006; urban consumers have been affected as well, or at least indices of food price changes would suggest so. Between September 2007 and September 2008-just after crop prices hit their peak-the retail cost of cereals and bakery products for urban consumers increased by 12.3 percent. Between January 2000 and December 2005 the year on year price increase for cereals and bakery products averaged a little over 2 percent.

As prices peaked, some conceptualized the issues as one of food vs. fuel as much of the consumer price increase was attributed to the increased demand for corn as the basic component of ethanol production. The ethanol demand for corn increased by nearly 100 percent between the 2005 and 2007 crop years while corn prices increased by 149 percent. It is easy to understand why ethanol was identified as the underlying culprit of the jump in food prices.

But the increase in food price is much more complex than just an "ethanol did it" story. In fact, not even the corn price increase itself is simply an ethanol-did-it story. Let's first take a brief look at the run up in corn prices before discussing the food price issue.

(March 3, 2009) - Events of the last year have taught us that blindly believing that markets are unequivocally self-regulating and universally self-correcting does not reflect reality. We are finding that those beliefs, while true under certain theoretical conditions, come up short in the real world.

We have been living in an alternate reality based on compellingly logical arguments coupled with ideological fundamentalism in the absence of "shocks" of a sufficient size to force financial, economic, and political leaders to confront the difference between the theoretical and the actual behavior of free markets. Events in the housing market, financial markets, and their worldwide repercussions provided that shock.

Events of the last year have also caused food and agricultural policy questions to pop up because the size of the "shock" was sufficiently large to break the status quo threshold. The resulting policy initiative involves rice. It involves developing countries' need to satisfy domestic needs while dependably servicing their export customers. The broader question is, does this represent a breakthrough to a new attitude toward international food and agricultural policy?

But we are getting way ahead of ourselves. Let's start from the beginning.

(December 29, 2008) - At the time of the writing of this column, the appointment of the new Secretary of Agriculture has not been announced. As the transition team goes about selecting the Secretary and as the Secretary approaches the development of agricultural policy, there are a few key concepts or considerations that we hope the new administration keeps in mind.

Food is different.

First, it touches the lives of every person in the world in a way that no other product does. We need to eat on a regular basis to maintain life itself.

Owning a television set, an automobile, or a pair of shoes may not be a moral imperative, but having access to food is. As a result, people react to food issues differently than other products. As former President Clinton recently said referring to the World Bank, the International Monetary Fund and his administration, "We blew it! We were wrong to believe that food was like some other product in international trade."