NASHVILLE, Tenn. – American bakers are lending their voice to a rising chorus of groups opposed to using food crops for fuel.
Last summer, there were riots in the streets of Mexico City over the 400 percent increase in corn tortilla prices, complaints from European brewers about the shift out of barley production and into rapeseed crops for the biodiesel industry and a call from a United Nations official for a five-year moratorium on grain-based ethanol production because it is taking food from starving people.
Now the American Bakers Association is calling on the U.S. Department of Agriculture to halt wheat exports until domestic bakers are guaranteed the supplies they need.
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“Extraordinary times call for extraordinary measures,” ABA president Robb MacKie said at the Commodity Classic convention held last week in Nashville.
The group is also requesting that the USDA allow an early release of acreage from the Conservation Reserve Program to help boost wheat acres in 2008.
On March 12, bakers will be marching on Washington to impress upon politicians how critically low wheat reserves are driving up costs of baked goods to a level that they say could financially strain low income families.
They want Congress to reassess its “recent infatuation with ethanol production,” which has taken acreage out of wheat and put it into corn.
Ed Schafer, U.S. secretary of agriculture, told American farm groups that bakers are not going to get far with their demands.
“We’re not going to limit exports because of market conditions,” he said.
Schafer also told reporters that the agency will not release any acreage from the conservation reserve without penalty, although that policy will be revisited in 2009.
Alan Tracy, president of the United States Wheat Associates, said the U.S. has evolved way past the attitudes that led to the 1980 grain embargo. It took a long time for the grain industry to live down the reputation it developed then as an unreliable supplier.
“Now that we’ve got that reputation back, we’re not wanting to throw it away,” he said.
The U.S. has laws in place that prevent agricultural products from being singled out for an embargo. Exports are not curtailed unless there is a declared national emergency.
“We’re not even close to that. Wheat prices are certainly high and farmers are making a little money for a change. That’s probably a good thing,” said Tracy.
Bakers could have covered the risk of rising wheat prices by using futures markets and other tools.
“I don’t have much sympathy for people that knew ahead of time that they needed wheat and didn’t find some way to cover at least a portion of their needs,” said Tracy.
He rejected the suggestion by bakers that low income families will be hard hit by the rising cost of flour and baked goods.
The average U.S. consumer eats 92 kilograms of wheat a year. A $3 per bushel increase in the price of the commodity would result in a $10 increase in the annual grocery bill of the average consumer.
“It’s not a huge inflation factor. It’s not going to break anybody,” said Tracy.
