Tag: price

Wheat Farmers Reconsider Biotech

  • Wheat farmers are re-considering the genetically modified seed question (Photo courtesy of the USDA)

You’ve probably noticed the price of
bread is a lot higher than just a year ago.
A big reason is higher wheat prices. Bakeries
are trying to figure how to keep costs down,
and farmers think they have an answer: develop
genetically modified wheat seeds. Julie Grant
reports:

Transcript

You’ve probably noticed the price of
bread is a lot higher than just a year ago.
A big reason is higher wheat prices. Bakeries
are trying to figure how to keep costs down,
and farmers think they have an answer: develop
genetically modified wheat seeds. Julie Grant
reports:

Nearly every major US crop is grown with genetically modified seeds – corn,
soybeans, cotton.

Biotech companies take genes from other organisms and put
them into corn and soybean seeds. This alters the behavior
of crops. One of the most used alters crops to withstand
herbicides. So, when an herbicide is sprayed, it kills the
weeds, but the crops survive.

But wheat producers said thank you, but no, to those genetically altered seeds.

Daren Coppock is chief of the National Wheat Growers Association. He says a
lot of wheat farmers didn’t need the genetically altered traits being offered.

First, weeds just aren’t a big problem in some types of wheat.

And second, Coppock says wheat growers were worried about the export market
in Europe and Japan. In those countries, they call genetically altered crops
‘Frankenfoods’.

“And so, it was something where some of our members would get the benefit, but
everybody faced potential risk of having customers say, ‘we don’t want this in
wheat.’”

Since the farmers didn’t want it, Coppock says Monsanto and the other big seed
companies dropped research into biotech wheat. That was five years ago.
Coppock says turning down biotech has since proven to be a bad move for
wheat growers.

Now, the big biotech companies don’t do as much research on how to improve
wheat, including breeding drought resistant varieties. Drought in Australia and
Canada is part of the reason there’s a wheat shortage now, making prices
higher.

“And so the conclusion that the industry basically has come to is, we have to do
something to change the competitiveness equation or we will end up, wheat will
end up, being a minor crop.”

And that could mean wheat shortages in the future.

So wheat farmers are re-considering the genetically modified seed question.
They think asking for new biotech wheat strains might kick start research on
wheat.

Bakers say something needs to be done – wheat prices are way high. And the
people who bake breads, muffins, cookies, and cakes are concerned.

Lee Sanders is with the American Bakers Association, which represents
Pepperidge Farms, Sara Lee, and many smaller bakeries.

“When wheat prices go up 173% in one year, it certainly effects how bakers can
do business. And how smaller bakers, in particular, if they can keep their doors
open.”

Those rising wheat prices are being passed on to consumers. A loaf of bread
that cost $2.50 last year has jumped to $2.85.

But bakers aren’t convinced biotech seeds will lower wheat prices. They’re more
concerned about how their customers will respond to the idea of genetically
modified wheat.

(supermarket sound)

Shoppers in the bread aisle at this Ohio supermarket have mixed views.

“We buy the cheapest bread we can find, so it wouldn’t make much difference.”

(laughs) “If it’s bread and it’s 70 cents, I buy it. It doesn’t bother me at all.”

“I don’t know, it just doesn’t sound good. I mean, I don’t mind paying a little bit
more for bread. Everything else is more expensive now too.”

“If it would keep prices down, I’d probably actually go with genetically altered
wheat.”

You might not realize it, but you’re already eating lots of genetically modified
foods. They’re added to all kinds of processed foods, from frozen foods to juices
and cereals.

The US government says they’re safe – so they’re not labeled.

But people in many other countries are more aware – and a lot more concerned
about biotech foods.

Doug Gurian Sherman is a senior scientist with the Union of Concerned
Scientists. If American wheat goes biotech, he says farmers will probably lose
their export markets.

“They can go elsewhere and they will go elsewhere. They really are trying to
avoid it for any kind of human food use.”

Even if wheat growers can persuade Monsanto and the others to start
researching genetically modified wheat, it will take at least five to ten years
before anything is in the field.

By then, farmers say, climate change may make
some places so dry that people will need biotech wheat whether they like it or
not.

For The Environment Report, I’m Julie Grant.

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Fuel Prices Hit Auto Factories

  • High gas prices are cited as one cause for SUV and RV factories closing (Photo by Ben VanWagoner)

High gas prices are changing what people
buy in car showrooms. Gas guzzlers just aren’t
selling as well anymore and it’s affecting US
manufacturers. Mark Brush reports:

Transcript

High gas prices are changing what people
buy in car showrooms. Gas guzzlers just aren’t
selling as well anymore and it’s affecting US
manufacturers. Mark Brush reports:

GM announced it’s closing four of its truck and SUV plants. And Winnebago Industries
recently announced they’re closing their biggest RV manufacturing plant. High fuel
prices are helping to drive the closings.

For the last fifteen years, sales of SUVs and light trucks have beat the competition from
smaller cars. But that’s changed in the last couple of months. Now, smaller cars are
selling better.

Charles Territo is with the Alliance for Automobile Manufactures. He says the recent
hike in gas prices have hit a nerve.

“I think for years people have been trying figure out what that pressure point is. When
consumers will actually change their driving habits and change their behavior. I think
we’re finding now that we’ve probably reached that price.”

Federal researchers say that people are driving a lot less. The Federal Highway
Administration reports that the number of miles traveled for the month of March was one
the sharpest drops on record.

For The Environment Report, I’m Mark Brush.

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Investors Driving Up Food Prices?

  • Congress is investigating whether investors are inflating the prices of food and gas for profit (Photo courtesy of the USDA)

The price of food is going up and some
members of Congress want to know why. The Senate
recently held hearings on whether investors in
the commodities market are artificially inflating
prices. Mark Brush has more:

Transcript

The price of food is going up and some
members of Congress want to know why. The Senate
recently held hearings on whether investors in
the commodities market are artificially inflating
prices. Mark Brush has more:

Big investors are moving money out of stocks and other investments and into
commodities.

In the last five years, the amount of money in commodities markets has
increased 20 fold. And there’s a theory that these investors are driving up food and gas
prices.

Timothy Wood says that’s not so. He’s the editor of ResourceInvestor.com.

Instead, he
says you’re paying more mostly because the dollar is worth a lot less these days. He also
says Congressional mandates to turn corn into fuel are driving up corn prices.

“When corn is so much a part of the American food chain, and the global food chain, it is
just a complete and utter farce that this has gone and been legislated.”

Wood says Congress should let the markets sort themselves out. But some members of
Congress wonder if big investors in commodities are getting rich at the expense of
families.

For The Environment Report, I’m Mark Brush.

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New Fuel Standards Come Up Short?

  • (Photo by Ben Van Wagoner)

The Bush administration’s new fuel economy
standards mean more fuel efficient cars in the
future. But Lester Graham reports some
environmentalists say it would have been better
for the environment and the economy if the standards
would have required more fuel efficiency:

Transcript

The Bush administration’s new fuel economy
standards mean more fuel efficient cars in the
future. But Lester Graham reports some
environmentalists say it would have been better
for the environment and the economy if the standards
would have required more fuel efficiency:

The standards call for a fleet-wide average of close to 32 miles per gallon by the year 2015.
Environmentalists say the first three years of the five year plan calls for an increase of
one and a half miles per gallon each year. But the last two years only require about a
half a mile improvement each year.

Jim Kliesch is with the Union of Concerned Scientists

“The fact that those numbers
trail off very quickly is a canary in the coal mine that something is amiss in their cost-
benefit analysis.”

The government’s cost-benefit analysis weighs whether more expensive technology –
such as a hybrid drive train – is worth the effort: will it save that money in gasoline.

But
the government’s cost benefit analysis predicted gas prices by 2015 would be about
$2.25 – more than a dollar a gallon less than we’re already paying. Using those prices,
the analysis short-changes the advantages of fuel saving technology.

For The Environment Report, this is Lester Graham.

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Better Mileage for Big Rigs

  • Front view of a semi-truck (Photo courtesy of the Federal Highway Administration)

With diesel prices above four dollars a
gallon, truck drivers are looking for ways to reduce
fuel consumption. Lester Graham reports some new
technology might help:

Transcript

With diesel prices above four dollars a
gallon, truck drivers are looking for ways to reduce
fuel consumption. Lester Graham reports some new
technology might help:

Manufacturers have been making trucks more aerodynamic. But, the trailers they haul
are not. In Holland they’ve found a way to reduce the drag caused by turbulence under
and around the trailers.

At the Delft University of Technology, researcher Michel van Tooren says properly
designed side-skirts – those are panels down low on truck trailers – make them more
aerodynamic.

“Of course side-skirts are not something new in the transport world. They are available.
Even McDonald’s has used for a while, trucks with side-skirts. The thing is that this
specific device has an aerodynamic trick on the front that makes it much more efficient.
Yeah, it really seems to work.”

Van Tooren says it cuts fuel use by an average of 7.5%, but some drivers have reported
a 15% savings in fuel.

For The Environment Report, this is Lester Graham.

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Paying for Peak Power

  • Advanced, individual meters that calibrate energy prices for each apartment. (Photo by Samara Freemark)

Energy prices are rising, and people are looking
for ways to conserve power. But some rate payers are
saving money without actually cutting their energy use.
Instead they’re changing when they use power. Samara
Freemark reports:

Transcript

Energy prices are rising, and people are looking
for ways to conserve power. But some rate payers are
saving money without actually cutting their energy use.
Instead they’re changing when they use power. Samara
Freemark reports:

It’s Saturday morning, and Ellen and Peter Funk are doing laundry.

The Funks used to do chores when most people do – they would get home from work and
switch on their dishwasher, dryer, and computer. They never really paid attention to
what that meant for their electricity bill.

“I never thought about electricity before. Never, never, never. Except when I got the bill.
But, you didn’t have any control. Because you paid the same price whether you used it at 2 in
the morning or 2 in the afternoon.”

But a couple of years ago the Funks started paying for their electricity differently than the
rest of us. They live in one of only a handful of buildings in New York City that
participate in a Real Time Pricing program.

Real Time Pricing charges consumers a different rate depending on when they use power.

The Funks know that running their dishwasher or turning on a light will cost more at 5
pm than at 10 pm. That’s because they get a color-coded chart every month that breaks
down their energy prices by time block.

“The green here is low. And the green starts at 10 o’clock at night and goes through 1
o’clock the following afternoon. The yellow is medium from 2 to 5 every day. And then
Monday to Friday there’s a high period from 5 to 9. That means stop. I think that’s why
they used red.”

It’s the same concept that makes cell phone minutes cost more during the day. Power
costs more when more people want to use it.

Real Time Pricing can save consumers a lot of money. Peter Funk says his family saves
hundreds of dollars a year by just shifting when they use energy.

“It’s an ongoing savings. We do these things because they make sense economically. We
don’t do it because we’re virtuous, we don’t do it because we’re better than our neighbor.
We just, this is the way we buy electricity because it makes sense.”

Real Time Pricing programs shift around power demand, so fewer people use energy
during peak hours. A Department of Energy study earlier this year estimated that Real
Time Pricing programs could cut peak energy use by about 15%.

That could actually help regions improve air quality and conserve resources by
decommissioning old, polluting power plants. Here’s how.

Most areas have a network of power plants. Usually only a few of those plants – the
newest, cleanest ones – are in use. But when energy demand peaks, the older, less
efficient plants kick in. And those plants spew a lot of carbon dioxide and other
pollutants into the air.

“It’s really not the number of power of power plants, but the ones you have to turn on at
critical times.”

Jim Genarro is a New York City councilman. He also chairs the council’s Committee on
Environmental Protection.

He says the plants that kick in when demand peaks are the worst in the system.

“We have a lot of reserve capacity in the city, but these are the older, dirtier plants, and
when you run those at peak capacity, it really means a lot of pollution.”

And Genarro says those plants cost even when they’re not producing energy. The city
has to maintain them all the time so they can switch on when needed. That wastes energy
and resources. It also means there are power plants that are only used a few weeks, or
even days, a year.

If power companies could cut peak energy demand, rarely-used, polluting plants could
become totally unnecessary. And many could be shut down.

For The Environment Report, I’m Samara Freemark.

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Food Prices to Stay High

  • Corn production in Colorado. (Photo by Scott Bauer, courtesy of the USDA Agricultural Research Service)

Food prices are expected to keep rising in the
coming year. That’s at least partly because farmers plan
to plant less corn. Dustin Dwyer reports:

Transcript

Food prices are expected to keep rising in the
coming year. That’s at least partly because farmers plan
to plant less corn. Dustin Dwyer reports:

Jim Hilker is an agricultural economist at Michigan State University. He says the
demand for corn is high right now.

“Ethanol’s probably the biggest driver of it, but there’s also been very strong corn
exports.”

Hilker says those exports are going to countries where the wheat crop has
come in lower than expected.

But with all the demand for corn, the U.S. Department of Agriculture says
farmers across the country are planning to plant about 8% less
corn this year, compared to last year. Last year farmers did plant more corn
than they had in more than 50 years. This year, corn production should still
be high, but it might not keep pace with demand.

Hilker says that could mean higher prices for food.

But he says there are a lot of other factors to consider when it comes to
food prices. He says gas is a big one, since food has to be transported.

For The Environment Report, I’m Dustin Dwyer.

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Food Prices on the Rise

  • Produce section of a supermarket in VA. (Photo by Ken Hammond, courtesy of the USDA)

Food prices are going up worldwide. A new survey
by the American Farm Bureau Federation finds supermarket
checkout costs have risen nearly 8% this year.
Julie Grant has more:

Transcript

Food prices are going up worldwide. A new survey
by the American Farm Bureau Federation finds supermarket
checkout costs have risen nearly 8% this year.
Julie Grant has more:

Retail food prices usually increase 3% per year. But over the last year the
cost of flour, cheese, bread, meat, oil, and produce is up – by more than
double the average.

The United Nations has predicted prices will stabilize in the long term. But
that consumers worldwide will face at least 10 more years of rapidly rising
food prices.

Commodity prices for corn, wheat, soybeans and other staples have been
skyrocketing over the past year – to more than double 2006 prices.
The higher costs are due in part to weather affecting crops, and growing
demand in China and India.

Economists also point toward the increased use of grains for ethanol and
other biofuels, putting pressure on food prices.

For The Environment Report, I’m Julie Grant.

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Food to Fuel Drives Wheat Prices

  • Mary Morran at Avalon International Breads in Detroit (Photo by Sarah Hulett)

Short supply and high demand for wheat means
prices are at record levels, and rising. But the high
cost of wheat is bad news for people who buy it. And
in North America, where most people’s diets are based
on wheat, that means just about everyone. Sarah Hulett
has this look at what’s behind the run-up in prices:

Transcript

Short supply and high demand for wheat means
prices are at record levels, and rising. But the high
cost of wheat is bad news for people who buy it. And
in North America, where most people’s diets are based
on wheat, that means just about everyone. Sarah Hulett
has this look at what’s behind the run-up in prices:

Jackie Victor is sitting on a stack of 50-pound bags of organic wheat flour inside the
bakery she co-owns. And these days, it’s a pretty expensive seat.

Victor says in the last year, what she pays for those bags of flour has doubled.

“So it’s a very scary time, and I don’t think just – really for the industry, although it is
scary for us – it should be a warning sign for the country that something here is amiss.”

In the fall, Victor raised her retail prices at Avalon International Breads in Detroit.

So a loaf of bread that comes out of this batch getting mixed by baker Kevin Boyer will
cost you 50 to 75 cents more today.

“This is the multigrain bread. This is our Motown Multigrain.”

Soon, one of those loaves will probably cost even more, because the price of flour keeps going up.

(forklift sound)

Avalon Bakery buys its flour from Dawn Food Products. Inside one of its central
warehouses, forklift operators move pallets of baking ingredients into tractor-trailors. It smells like a kitchen pantry. And that’s basically what this is: a gigantic
pantry full of baking ingredients that will be shipped all over the world.

Miles Jones points out a pallet full of wheat gluten, which is used in most commercially-produced baked goods.

“That’s vital wheat gluten there. The price of that vital wheat gluten, just as an example,
has about tripled here in the last six months.”

Jones is co-chairman of the board at Dawn Foods. He’s been in the baking industry for close to four decades, and he says he’s never seen prices so high.

There are several reasons for the spike in wheat prices. Drought and other bad weather
wiped out a lot of the global wheat crop over the past two years. And fast-developing countries like China
and India are consuming more food made from wheat.

And then there’s the ethanol factor. More farmers are planting corn to sell to ethanol
refineries. Jones says that’s gobbling up land that used to be planted with wheat and other
crops. And he says it’s put us on a dangerous path.

“The end results are in the paper every day. You can see the skyrocketing food prices. And when you start trading food for energy, that’s not a good trade long-term.”

With wheat prices at record levels, more farmers might decide to plant it this year. That would boost supply and bring prices down.

Bruce Babcock is an economist, and he heads the center for Agricultural and Rural Development at Iowa State University. He says the test for that theory will be the amount of spring wheat that gets planted in April and May.

“The problem of course, for farmers, it’s not really a problem, it’s a great thing for farmers, is that they can pick wheat or soybeans or canola or any crop and the price is out of this world. So because the price of everything else is up so high, I don’t think we’ll see wheat increase as much as we would hope.”

Babcock says there is some good news on the global supply front. Australia and Argentina are expected to harvest a normal amount of wheat this year. Those are two major wheat producers that had a couple of years of terrible crops.

A big question will be whether farmers in the US and Canada will get the kind of weather they need and a bumper wheat crop this year.

For The Environment Report, I’m Sarah Hulett.

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Crop Prices Cut Into Conservation

  • Corn production in Colorado. (Photo by Scott Bauer, courtesy of the USDA Agricultural Research Service)

With grain prices hitting record highs, a lot
of farmers are removing land from the federal Conservation
Reserve Program. The CRP pays farmers to stop growing
crops on poor land and instead grow trees or grass cover.
That creates habitat for wildlife. The US Department of
Agriculture, which runs the program, says the CRP is still
in good shape. Katherine Glover reports some conservationists
disagree:

Transcript

With grain prices hitting record highs, a lot
of farmers are removing land from the federal Conservation
Reserve Program. The CRP pays farmers to stop growing
crops on poor land and instead grow trees or grass cover.
That creates habitat for wildlife. The US Department of
Agriculture, which runs the program, says the CRP is still
in good shape. Katherine Glover reports some conservationists
disagree:

When the Conservation Reserve Program started in 1985, David Schoenborn was among
the first on board.

He stopped farming some of his land and let natural cover grow. The U.S. Department of
Agriculture paid him. Usually land that wasn’t the best farmland or land that was prone
to erosion was set aside for the program.

Conservationists say CRP has been great for reducing soil erosion, improving water
quality and restoring wildlife habitat.

But this year, for the first time, Schoenborn is letting some of his CRP contracts expire.

“It’s not a bad program, but the payments have to be more to keep them in line with the
rest of the farming economy.”

Corn and other grain prices are at record highs. So a lot of farmers are taking land out of
CRP and plowing it up. The program lost more than two million acres last September.

It could have been much worse. Originally sixteen million acres were set to expire in ’07.
But, in 2006 the USDA offered landowners the option to renew their contracts. About 80
to 85 percent of the land was re-enrolled.

The USDA is focusing its conservation efforts towards environmentally sensitive lands
and critical wildlife habitat.

Perry Aasness is the state director for the USDA Farm Service Agency in Minnesota.

“We’re not enrolling whole fields of land anymore, but there are still conservation
programs which we call the continuous CRP and that primarily focuses on really
targeting buffer strips, waterways, and that sort of thing.”

The targeted programs pay more than the general CRP contracts, making them more
attractive to farmers. Schoenborn, for example, is reenrolling eligible lands in these
targeted programs.

Altogether, the various programs have about 34 million acres enrolled. This is slightly
above the average enrollment for the past ten years, but less than the 39 million acres
authorized by Congress. Aasness says the program is still in good shape.

“I think the overall percentage of land going into production from CRP is pretty
minimal.”

But conservationists have a different perspective. They want to see as much land as
possible enrolled in CRP.

Dave Nomsen is with the conservation group Pheasants Forever:

“Frankly I think the program is more in doubt than it ever has been. It’s great that
farmers are benefiting from record crop prices but it’s making it a real challenge to keep
conservation as part of that agricultural landscape.”

And political pressure is part of that challenge.

The American Bakers Association even asked the government to let CRP contracts expire
early so farmers can plant more grain. This would hopefully lower the price of flour.

But a huge reduction in CRP acres is unlikely. Both Republicans and Democrats support
CRP.

Dave Nomsen with Pheasants Forever says the problem is finding enough money to make
it worth it to farmers.

CRP payments do change over time depending on the market. But Nomsen says they
haven’t kept up.

“It’s been lagging behind by several years. We just don’t have the money to raise it up to
an equal basis, but if we can get those payments high enough the long-term nature of the
contracts, the many, many other benefits of the program will hopefully sell the program
for farmers and landowners.”

Farmer David Schoenborn says payments vary, but generally he gets between 75 and 90
dollars an acre. By planting corn, he thinks he could make at least $400 an acre. But he’d
stay in CRP if payments increased just 30 percent.

That’s not likely. So chances are that more farmers will be putting land that’s set aside
for wildlife back into crops.

For the Environment Report, I’m Katherine Glover.

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