Ethanol's a Problem for Food Producers, But not the Only One
Always beware of superlatives. Whenever anyone says "all" or "always," that's a good time to turn on your BS detector.
But it also works with what I'll call "sub-superlatives" â€" what are often called "weasel words." This is when somebody says or writes that "many observers say.." or "most of the time--". Sometimes, these constructions are accurate. But sometimes they're not.
Witness, for example, the first paragraph of a Forbes.com article yesterday about the struggles of meat and poultry producers:
Food production costs are soaring and it's mostly due to that pesky ethanol mandate.
Really? "Mostly"? Well, it's possible I guess, since nobody has yet been able to produce a convincing breakdown of how much impact each of the many causes of rising commodity costs has had on input costs. Those causes include rampant speculation in futures markets and burgeoning demand for grain among developing nations, as well as the (admittedly odious) ethanol mandates.
Worse, the article doesn't even try to back up the assertion that the mandates are "mostly" to blame for high prices. It's merely a litany of the woes of various companies such as Smithfield Foods, Sanderson Farms and Pilgrim's Pride, and quotes from some of those companies' executives complaining about ethanol mandates.
And those executives have a righteous beef. But in each case, their companies are dealing with other problems as well â€" not least falling revenues, which have nothing to do with their input costs.