Let’s get the important stuff out of the way up front: I am not anti-ethanol. I’m not anti-biodiesel. Let me say this in a slightly different way: I think biofuels are critical to a formula that will eventually wean this country off a good chunk of the fossil fuel it imports. I’m not anti-export, nor am I in favor of export controls. I love a good free enterprise system, and bless the entrepreneur who makes a profit. However – you knew there would a “however” – I’m more and more convinced we’re about to reach one of those ugly moments where the critics get to say, “I sometimes hate it when we’re right.” It’s time for a reality check.

I base my concern on irrefutable evidence, namely the mainstream media is reporting on skyrocketing food prices at home and around the globe, food riots, eroding crop production, and attributing the fall of at least two Northern African dictatorships, in part, to the availability and cost of food. When the mainstream media finally trips to a story about food and agriculture, it’s likely the problem is worse than what’s being reported.

At this week’s USDA Ag Outlook Forum, the department dropped a significant bombshell, ignored by most because 1) everyone was salivating over record export predictions along with record cash and net farm income predictions, and 2) USDA rarely connects the dots between production developments and consumer impacts.  So, what was the boomer? U.S. food costs will rise as much as 4% this year, more than the 2-3% predicted just last month. The reason: A “surge” in prices for meat, eggs, cooking oils, fruits, vegetables, sweets, cereals. Food inflation in this country is accelerating at the fastest rate in 28 years. Why? The costs of ingredients are sitting at historical highs. I submit that “surge” has been building for nearly a decade.

Americans pay on average 10-11% of their take home pay for food. The key phrase in that sentence? “…on average…” Many in this country routinely pay 20-30% of their take home pay to feed themselves and their families.

In a separate presentation, USDA Chief Economist Joe Glauber provided couple of biofuels factoids: First, U.S. ethanol use is expected to hit more than 13.5 billion gallons on an annualized basis, and “this far exceeds” levels implied by the federal Renewable Fuel Standard (RFS) mandate of 12.5 billion gallons in 2011. Second, U.S. corn for ethanol use is expected to grow to 5 billion bushels in 2011-2012, 37% of total corn use and 36% of total corn production. Corn prices are forecast at a record $5.60 per bushel. He made a similar forecast for soybeans given there’s a reinstated federal $1-per-gallon blenders’ tax credit for biodiesel back on the books. While the percentage of soybean production that goes to biofuels is tiny compared with corn, it’s still a factor.

Here’s another interesting and wholly related development: Sanderson Farms Inc. expects to spend $330.7 million more for poultry feed in 2011 than it did in 2010, adding 10.5 cents per pound to its production costs. Rising feed costs and uncertainty about the direction of the grain markets this year caused the company to delay a planned expansion at a new plant in North Carolina, according to The Wall Street Journal.

This isn’t just about our domestic food and feed needs taking a backseat to other economic forces.  It’s about record low grain stocks at home, skyrocketing prices, erratic growing weather, unfettered export growth — exports are predicted at record levels for the coming year, and we’ve now reached the point where one out of every four rows of soybeans the U.S. grows gets shipped to China – and it’s tied to a sea change in industrial competition for corn and soybeans as basic ingredients.

I’m sure there are folks out there who can and will make convincing arguments that ethanol refining diverting nearly 40% of the available corn in this country from feed and food use is totally unrelated to the domestic pull-back in beef, pork and poultry production – and increase in supermarket prices – USDA is predicting for 2011-2012. I’m guessing those same folks can make the same arguments for why soybean-based biodiesel is also unrelated to feed costs.

But back nearly a decade ago when the RFS was being debated in Congress, poultry interests pushed hard for a formula with mandatory triggers that would prevent skyrocketing feed and food costs based on exactly the scenario playing out today, a scenario pooh-poohed by Senators and others who thought they knew better than producers. Might be time to revisit that formula idea.

We’d better start connecting the dots on crop production, exports, feed use, food use, industrial use and whatever other use is out there. It’s time to take our collective heads out of the sand. This isn’t about short-term profits, it’s about long-term survivability.

This country is a crop production miracle, but it is not an unlimited source of corn, beans, wheat, rice, cotton and other crops. Bottom line: The consumer is paying the price, and those who can’t pay the price are getting fed up.