Nelson defends ethanol industry from big business attacks

As food prices soar, a campaign organized by the Grocery Manufacturers of America is pointing the finger at ethanol as the culprit behind the increases.

But Sen. Ben Nelson, D-Neb., and a bipartisan coalition this past week came to the defense of ethanol, saying higher energy costs are causing food prices to increase.

"I'm not sure when it happened or why it happened, but it's incredible to me that someone decided to add ethanol to the members of the axis of evil," Nelson said. "They ignore the fact that the cost of oil has far more triggered the cost of products and living in the U.S. than the grinding of corn into ethanol."

Nelson's defense of the ethanol industry was praised by the Nebraska Corn Board and Nebraska Corn Growers Association.

The bipartisan group of Democratic and Republican senators organized by Sen. Chuck Grassley, R-Iowa, called the campaign "... a smear campaign based on ignorance," Grassley said.

"My question to the Grocery Manufacturers Association is, do you want America to place its trust in OPEC or in U.S. farmers?" Grassley said. "The short-sighted, self-serving campaign of this trade association and its allies is at America's expense."

Jon Holzfaster, chairman of the Nebraska Corn Board, said high fuel and energy prices are a major factor in higher food prices.

"If you take away ethanol, fuel prices will increase even more and food prices will follow," Holzfaster said.

On Friday, Nebraska AAA reported gas and diesel prices hit a record high in Grand Island. Regular gasoline without ethanol averaged $3.83 per gallon. That was 35 cents higher than a month ago.

Diesel prices averaged $4.60 per gallon, which was 49 cents per gallon higher than a month ago and $1.70 higher per gallon than a year ago.

Also, on Friday, oil prices soared to more than $135 per barrel.

Randy Uhrmacher, Nebraska Corn Growers Association president, said food companies and farmers would be better off "working together to find solutions to the real cause of higher food prices -- our reliance on oil."

Nebraska's corn organizations estimate that ethanol is saving consumers at least 15 percent at the pump, and that translates to about $70 billion per year.

"As an oil-based economy, we have to move to renewable fuels in order to provide for our own energy security in the future and that means we're not going to find the solution to the problem at the bottom of the next empty oil well," Nelson said.