Washington D.C. (October 23, 2007) - A diverse coalition of farmer, religious and consumer groups today released a letter to the Senate Agriculture Committee urging the Senate to address the need for strategic grain reserves in the wake of volatile crop prices and record-low global grain stocks. In July, a coalition had written a letter to the House citing the need for reserves. Since that time, the lack of a strategic grain reserve has become an even more urgent priority in the wake of global media concern on food prices and as USDA is predicting the lowest level of world carryover stocks on record since 1947. The letter states: "We are one moderate drought or disaster away from seeing $10 per bushel corn prices that would destabilize our entire economy and we have no plan in place to address this possibility," the letter said. The Senate should address this issue, which was virtually ignored during the House farm bill debate.

Dennis Olson from the Institute for Agriculture and Trade Policy said that the new ethanol boom has increased price volatility in crop, food and energy markets, and that reestablishment of strategic grain reserves would ease the uncertainty of farmers and consumers by stabilizing prices in these interrelated sectors. "Already, you see agribusiness groups such as the National Cattlemen's Beef Association and the National Chicken Council acknowledging the instability in the market and calling for a 'safety valve' in case of a short corn crop. But their solutions, such as allowing more CRP acres, are extremely flawed and do nothing to encourage long-term food security, which a grain reserve would accomplish," said Olson.

Strategic reserves, by stabilizing commodity prices, could also save money over the long run by reducing the need for taxpayer subsidies. While current commodity prices are high, a similar projection was made back in 1996 during the Farm Bill. After prices subsequently collapsed, Congress had to bail out farmers with expensive emergency payments. George Naylor, an Iowa corn and grain farmer and president of National Family Farm Coalition, said, "Establishing a grain reserve in conjunction with a floor price would help address the inevitable volatility that can expose farmers to devastatingly low farm prices overnight. Now is the time to put in place forward-thinking policy, not after a disaster that could have easily been prevented."