Ethanol, Corn Not Culprit in Rising Food Prices
The American Farm Bureau Federation, Growth Energy, National Farmers Union, and National Corn Growers Association joined together today to host a media call to applaud the recently released report from the Congressional Budget Office, “The Impact of Ethanol Use on Food Prices and Greenhouse-Gas Emissions.” The report concluded that from April 2007-April 2008 ethanol did have a slight impact on rising food prices but that other culprits, such as high energy prices, had the most impact on rising food costs. Of the 5.1 percent increase in food prices, expanded ethanol production contributed between 0.5 and 0.8 percent of the increase in food prices measured by the consumer price index.
Bob Stallman, President of the American Farm Bureau Federation, began by saying, “The results come as no surprise to us. We have called for hearings to determine why food prices have increased. It’s disingenuous to only look at corn when determining why food prices are increasing. We think they owe us an apology.”
Tom Buis, CEO of Growth Energy expanded on the factors that did have the most impact on rising food prices including the weak dollar, increased exports, unregulated energy markets, and oil speculation. Roger Johnson, President of the National Farmers Union noted that studies have shown that during the same time food prices and gas prices were on the rise, ethanol saved consumers an average of 34 cents per gallon. This equates to nearly $500 per year for the average family.
The ethanol industry has recently filed a “Green Jobs Waiver” or “E15 Waiver” with the EPA to increase the blend level from 10 percent to 15 percent. It has been argued by ethanol proponents that unless the blend wall is increased the industry won’t be able to achieve the goals set out in the Renewable Fuels Standard (RFS) calling for 36 billion gallons of biofuels blended per year by 2022. “We won’t get there unless we make the ethanol industry profitable again and get through the higher blend wall,” summed up Rick Tolman, CEO of the National Corn Growers Association. “We will provide what we need to get to the next generation of biofuels.”
2 Comments
Al Wunsch
Ethanol, nevertheless, contributed to the increase in food prices, not a good tradeoff – fuel vs food. However, I was under the impression that ethanol (corn based) did increase the cost of corn which, of course, impacts food costs. What I’ve read about ethanol also indicates that it is not as efficient as gasoline in providing energy to drive vehicles. Overall, it may be a new source of revenue for corn growers but is not a good or beneficial (overall) direction to move in the quest for alternative fuels. We need to find fuels for transportation that do not have the potential to cause shortages and/or cost burdens on the world’s food supply.
Jake Millan
@ Al Wunsch,
Al, what you probably didn’t know is that the corn that is used in the production of ethanol is called #2 corn, and it is not directly eaten by humans. Most #2 corn goes into animal feed, like cattle, and they actually prefer to eat the meal that is the co-product after you’ve taken the starch out of corn to make ethanol. Corn to ethanol is available RIGHT NOW on an infrastructure, production, and vehicle utilization standpoint, and thus can contribute to immediate petroleum reduction goals today. Also, just as petroleum is getting harder and harder to extract, corn ethanol and other renewables are getting more and more efficient every day. One needs only to look at the most recent report by the USDA that states this:
{Ethanol produced by a typical dry-grind plant delivers about two times as much energy as it takes to grow the corn and make the fuel, according to a USDA analysis. The energy balance of ethanol can be as high as 2.8 times the amount of energy needed to produce it, if the fuel is made in a plant that is powered by biomass.
In a 2004 study, the net energy balance was about 1.8.
“Ethanol has made the transition from an energy sink, to a moderate net energy gain in the 1990s,, to a substantial net energy gain in the present. And there are still prospects for improvement,” the study said.}
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