Feed&Grain.com |

FoodPriceTruth.org reveals smear campaign against ethanol

The nation’s largest food companies, all members of the trade group Grocery Manufacturers of America, have recently been accused of funding a public relations smear campaign to blame biofuels for rising food costs. Now, a new analysis by FoodPriceTruth.org reveals that the corporate profits of these same giant food companies have soared during the past 12 months as much as 121% in the case of the Campbell Soup Company.

“Food corporations would rather spend millions of dollars on an ethanol smear campaign than explain to consumers why their food prices are so high,” said Brooke Coleman, a FoodPriceTruth.org spokesperson. “Blaming biofuels for high food prices is a great trick for these large food corporations. They get to raise their prices, increase their profits and not worry about how it affects American families.”

BioFuel reports hedging losses

Biofuel Energy Corp. announced that it had realized approximately $36 million of hedging losses resulting from closing out various corn, ethanol and natural gas hedges. All of the related contracts were entered into with Cargill, Inc. Cargill has not yet been paid for approximately $22 million of these amounts and the parent company currently does not have sufficient liquidity to retire these obligations. Cargill delivered a notice of default with respect to certain contracts to the company, and exercised its right to liquidate those contracts (approximately 60% of the company’s hedge position), resulting in the associated losses.

As a result, BioFuel Energy Corp.’s operating subsidiaries, which own and operate the Wood River and Fairmont ethanol plants, amended their credit agreement to permit them full access to their $20 million working capital facility and permits daily access to their revenue account, solely for the purchase of corn, natural gas, chemicals, enzymes, denaturant and electricity. The operating subsidiaries now appear to have sufficient liquidity to complete the commissioning of the ethanol plants.

The amendment still will not permit it to completely meet its obligations to Cargill. The company indicated it intends to continue to review possible solutions with Cargill and its operating subsidiaries’ lenders. However, there can be no assurances these efforts will prove successful.

Miscanthus can meet U.S. biofuels goal using less land than corn

In the largest field trial of its kind in the United States, University of Illinois researchers have determined that the giant perennial grass Miscanthus x giganteus out-performs current biofuels sources by a significant amount. The new findings were published in the journal Global Change Biology.

Using corn to produce enough ethanol to meet the current White House goal would take 25% of current U.S. cropland out of food production. The same amount of ethanol from miscanthus would require only 9.3% of current agricultural acreage. Miscanthus can generate enough biomass to produce two and one-half times more ethanol than can be produced from corn.