ETHANOL "SEDUCTION" IS DRIFTING AWAY

Rising Food Prices; Water Resource Impact Cited

Support for continuing federal supports for corn-based ethanol production is beginning to weaken given increasing food bills for consumers and lost acreage for other crops. Livestock, poultry and meat groups, citing a nearly 60% jump in feed costs since 2005, say their profits are dropping as food prices rise. USDA said consumers can expect to pay as much as 4.5% more for groceries and restaurant meals this year compared to 2006, nearly twice the increase the year before. Oil interests, saying they support ethanol, argue against tax breaks and import barriers, saying ethanol prices are low enough to entice purchases without federal mandates. At the same time, the National Academy of Sciences (NAS) released a report this week that said the production of biofuels in the U.S. threatens water resources. "If the projected increases in the use of corn for ethanol,occur, the harm to water quality could be considerable, and water supply problems at the regional and local levels could also arise," NAS said. The House-passed Farm Bill and the pending Senate bill will both carry heavy research incentives to find alternative feedstocks for ethanol and other farm-based fuels.