Biofuel demand in US driving higher food prices, says report

Demand for biofuels in the US is driving this year's high food prices, a report has said. It predicts that food prices are unlikely to fall back down for another two years. The report, produced by Purdue University economists for the Farm Foundation policy organisation, said US government support for ethanol, including subsidies, had fuelled strong demand for corn over the last five years. A dramatic rise in Chinese imports of soybeans was also putting pressure on prices and supply, the report said. Since 2005, a growing number of US farmers have switched to corn and soybeans from other crops. Farmers in other countries have also switched to corn but, the report said, the demand kept growing. "In 2005, we were using about 16m acres [6.4m hectares] to supply all of the ethanol in the United States and Chinese soybean imports," Wallace Tyner, one of the authors said. It took 18.6m hectares (46.5m acres) last year, just to satisfy that demand. The US department of agriculture reported earlier this month that US ethanol refiners were for the first time consuming more corn than livestock and poultry farmers...more