Food or Fuel?

The growth in biofuels is putting new pressures on the global food supply chain.

1 minute read

April 11, 2007, 2:23 PM PDT

"North America's love affair with ethanol -- produced mainly from corn -- is unleashing a surprising surge of inflation through the global food supply chain.

The U.S. Department of Agriculture warned yesterday that record high corn prices, caused in part by the crop's diversion into ethanol production, is likely to produce a sudden drop in the supply of meat.

U.S. farmers will produce 450 million kilograms less beef, chicken and pork this year than last, according to the latest USDA estimates. That represents a cut of roughly one kilogram per person, reversing a long-term trend of rising meat production in the United States.

The impact isn't just being felt in the United States. The biofuels boom is causing corn and soybean prices to start moving in tandem with crude oil prices, the International Monetary Fund warns in its twice-yearly World Economic Report, due to be released today."

FULL STORY: Appetite for ethanol spurs food price inflation

Wednesday, April 11, 2007 in The Globe & Mail

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