This spring we’re seeing and hearing a lot about rising prices in the supermarket. And just like a few years ago, ethanol is taking a lot of heat over it. Food aid groups, global food companies and consumer activists have all taken their turns beating up on biofuels, accusing them of being behind food price increases.
On the surface, the argument almost seems plausible. If some corn is used to make fuel, there must be less of it for food. But, for many reasons, this argument is way off base. Here are a few facts to keep in mind next time you hear someone bashing biofuels on the news or at a backyard barbeque.
First, contrary to what you might have heard, ethanol production actually uses only a tiny percentage of the world’s grain supply. And virtually none of it is grain that people actually eat, like rice and wheat. Instead ethanol is primarily made from feed corn, the kind we mostly grow here in Iowa to feed hogs, chickens and cattle. The sweet corn we eat off the cob or from a can has never been used for ethanol.
A little bit of the country’s feed corn is ground up to make corn flakes and other foods. But ethanol isn’t behind any price hikes there, either. Only about 5 percent of the price you pay for a box of corn flakes is actually the cost of the grain. Most of what you pay for in a box of cereal goes for other things, like manufacturing, packaging, marketing and transportation.
Another fact often overlooked is that corn ends up as livestock feed even after it’s been used to make ethanol. More and more farmers use a co-product of the ethanol process, called dried distillers grains, to feed livestock.
But perhaps the biggest mistake of the “blame ethanol crowd” is underestimating the production capabilities of American farmers. Yes, ethanol has increased the demand for corn, but farmers have more than responded. These days corn harvests of 12 billion bushels or more are typical in the United States. That size of a corn harvest would have been astonishing only a decade ago, when crops of 8 billion bushels or so were the norm. The bottom line: Farmers have been able to grow plenty of corn for both food and fuel. And by increasing efficiency and adopting new technology, farmers have been able to grow all of that additional corn on only a few more acres while reducing their environmental footprint.
So what’s behind the rise in food prices? No matter what you might hear, oil prices remain the biggest factor. Food companies, just like you and me, are paying more for the petroleum they use to process and deliver their products. The companies, which want to protect their profits, are passing those costs onto consumers, just as they did the last time gas prices spiked.
Instead of being part of the problem, biofuels really are part of the solution to volatile petroleum –and food— prices. By producing more of our fuel at home, the United States can finally start to kick its addiction to foreign oil. That can lead to more stable and affordable fuel, and food. And this first generation of corn-based production is paving the way for making fuel out of other things, like corn stalks, municipal waste and algae. With more home-grown fuels in our tanks, we’ll have leverage to tell the oil sheiks and dictators to “shove it” when they try to hold Americans over a barrel at the gas pump or at the supermarket.
Written by Dirck Steimel
Dirck is the news services manager for Iowa Farm Bureau.