Maybe it's a good thing that American biofuel plants are filing for bankruptcy protection. According to a previously secret report conducted by the World Bank and obtained by the Guardian newspaper, biofuel production is hugely responsible for the food price crisis. How much? The report - the "most detailed analysis of the crisis so far," in the Guardian's words - says that biofuels caused global food prices to rise by 75 percent. This is much higher than previous estimates. Food Before Fuel estimated a 30 percent influence, and the Guardian says the U.S. government claims that biofuels were responsible for just a three percent rise.

The kicker? The report was finished in April but has been kept secret "to avoid embarrassing President George Bush," the Guardian writes. We wouldn't want that, now, would we?

Requiring ethanol and biodiesel in national fuel supplies helped push costs up, but sugarcane ethanol from Brazil did not play as big a role. All the more reason to bring out the second-gen biofuels as soon as feasible. Read more here.

[Source: Guardian]

Certainly not an unbiased observer, the United States Department of Agriculture (USDA) has issued an economic analysis that reveals that crops grown for biofuels (in the U.S., that means mostly soybeans for biodiesel and corn for ethanol) are not responsible for the recent increase in food prices. In fact, the USDA found that just about anything but biofuels are to blame: high energy prices, increasing global demand, drought and other factors are all called "primary drivers" of the increased food costs. The National Biodiesel Board liked what it heard, and has put out a statement saying that the USDA analysis "affirms wisdom of U.S. biofuels policy" (read it after the jump). The USDA's food and fuel website is here. Last month, the Grocery Manufacturers Association issued a statement that claimed just the opposite of what the USDA is saying, and we all know that this debate has gone on for a long while. There is little reason to believe the USDA will have the last word. Who's up next?

Yesterday, I wrote about an article in the Economist that equated the amount of maize it takes to make a gallon of ethanol with a year's worth of food. Earlier today, we saw the latest bit of bad news from an ethanol producer (the suspension of construction of a large ethanol plant in Imperial Valley). Still, ethanol does have its defenders, and one of them - from Poet Energy - contacted AutoblogGreen to point us to a brand new study by Informa Economics that finds that overall food prices have a "weak correlation" with the price of corn. In other words, don't blame E85 for the increased cost of your dinner.

Actually, the study is long-term and looked at 20 years of data. The results are what's new. Reuters says that the study "shows that corn prices have minimal impact on the U.S. Consumer Price Index for food, which has been on the rise." Reuters reporter Christine Stebbins spoke with Bruce Scherr, Informa's chief executive, who said, "We're not saying that corn prices are cheap, that ethanol hasn't helped underpin the growth in the corn economy. What we are saying is to blame corn and corn-based ethanol for all of the inflation associated with food and food prices ... is to grossly under-consider all the other forces at work." In other words, don't blame E85 for all of the increased cost of your dinner.

Renewable Fuels Foundation funded the Informa study. You can read Informa's announcement or download the complete study (both in PDF).

[Source: Domestic Fuel, Reuters via Nathan S.]

Every day, it seems, corn ethanol gets a little less attractive. In fact, if the information in this article from the latest print edition of The Economist catches on, then ethanol advocates are going to have two more easy-to-remember absurditiies to defend: 1.) biofuels will use a third of the maize grown in the U.S. this year and 2.) filling "up an SUV's fuel tank with ethanol [uses] enough maize to feed a person for a year."

I'm not saying I want to eat corn for a year, but there is a lot of corn in many of the prepared foods sold in America (high fructose corn syrun, corn meal, etc.). Shifting so much of the grain from food to fuel - and the resulting effect on food prices - gave The Economist the idea to title the article "The end of cheap food." Welcome to the era of the ethanol-guzzlers driving to buy $10 boxes of corn flakes?

I recommend checking out the full article for the details, but before you go, let's just wonder out loud what type of ethanol the writer is talking about with that gas tank comment. Is it E85 going into the tank? That's most likely, because that the fuel that is commonly sold as "ethanol" in the U.S., but perhaps the dramatic number requires us to calculate using E100. It's an important distinction, but the general message stands whatever percentage we're talking about.

[Source: Ethanol, thanks to Nick B.]

Here's the deal: ethanol is not the only reason that the average price of a bowl of cereal and milk is moving from 44 cents last year to 49 cents this year to an expected 56 cents next year. But, as AP writer Lauren Villagran explains, a weak U.S. dollar, high fuel prices and China's growing economy don't hide the fact that the rapid increase in corn ethanol production is affecting people at the grocery store. And so, the "worst bout of food inflation since 1990" does have something to do with all those millions of gallons of etahnol. And are you ready for this tidbit: "China will import almost 50 percent of the world's oilseeds within a decade, becoming the world's largest importer, according to estimates from the Organization for Economic Cooperation and Development." That will affect food and biofuels, no doubt. The upshot of Villagran's article is that these prices are part of a complex, global issue. Will it follow that more people will demand high-efficiency, low-liquid-fuel-using cars pronto? Or will Americans just buy steak less often?

[Source: AP]