As Corn Commentary prepares for the New Year, our bloggers look back at some of their favorite posts about agriculture that appeared on other blogs throughout the year. In April, The Farmer’s Life ran “Corn Use, Food Prices and Ethanol,” which offered insight into the food versus fuel debate from a fresh perspective. This insightful piece, authored by a farmer from northwest Indiana, injects nuance and insight into the conversation.
High commodity prices have reignited the food versus fuel debate. Not that it ever really went away, but with farmers reaping high prices for several months now you can see how it’s easy for those who don’t have the right information to make the connection that high commodity prices directly lead to high food prices. Makes sense right? If the price of ingredients goes up, then the price of food must go up too? Well, it’s not that simple.
Let’s talk about corn because it’s the one crop that is at the heart of this debate. If you follow any discussion about the price of corn it won’t take long before you find talk of the price of oil. Corn prices follow the same trends as oil, and at the same time corn will do the opposite of what the value of the American dollar is doing. Those are two of the biggest reasons corn prices are so high right now. Another problem is we’ve have a couple years of tough weather robbing some yield which puts in a situation today where we have tight carry over stocks of corn. The Middle East, source of much of the world’s oil supply, is going through some significant political shifts in many countries and it’s affecting the flow of oil out of those countries. At the same time the value of the dollar is dropping. Now that we have a very basic understanding of why commodity prices are soaring let’s get back to the food versus fuel deal. Proponents and opponents of ethanol often agree that 40% of US grown corn goes to ethanol production. I was at a marketing meeting a while back and the speaker put it another way. Four out of every ten rows of the corn we grow is taken to an ethanol plant. That statement allowed me to visualize that statistic in a very real way. Four out of every ten? That sounds like a lot!
OK, you probably think that sounds like a lot too, and I won’t argue with you, because I think it does too, at least on the surface. Critics of biofuels will often stop their argument right here. 40% of the crop going to ethanol, no wonder food prices are rising! Once again it’s not that easy. Ever heard of dried distiller’s grains or DDGs? This is the by-product of corn ethanol production. It’s a concentrated feed stock that is sold to the livestock industry. When you take into account the amount of DDGs going to livestock, therefore putting that corn back into the food market you bring that 40% of corn going to fuel down to 23%. So we’ve cut that usage number nearly in half, and we’re just talking about the United States. If we look at grain use on a global scale, only 3% of grain is going to ethanol production. And don’t forget, we export corn in this country, which means we’ve got product left over after we get what we want out of it to sell to countries all over the world.
The Renewable Fuels Association has written a post entitled Understanding the 2011 Planting Outlook, Ethanol and Food Pricing covering all these figures and how farmers are producing more on the same amount of total acres year after year. You can see in the RFA chart that planted acres haven’t changed in 15 years. As farmers continue to adopt new technologies in seed and equipment, and increase the use of more and more environmentally friendly practices like cover crops, they are going to keep getting more productive in the future.
So you don’t need to worry that you’re starving children in underdeveloped countries if you top off your tank with E15, E85, or biodiesel. It’s more likely those kids are starving due to regional economics and politics, not because American farmers are greedy.
Thanksgiving dinner this year will cost more, but it’s still a bargain no matter how you slice it.
According to the American Farm Bureau Federation (AFBF), the retail cost of menu items for a classic Thanksgiving dinner including turkey, stuffing, cranberries, pumpkin pie and all the basic trimmings increased about 13 percent this year. That may seem like a lot, but it still means that the average cost to feed a hungry table of ten is less than $50 – not even five bucks a plate. Try to get that in any other country for the same price!
“The quality and variety of food produced for our dinner tables on America’s diverse farms and ranches sets us apart from our contemporaries around the world,” said AFBF President Bob Stallman. “It is an honor for our farm and ranch families to produce the food from our nation’s land for family Thanksgiving celebrations.”
The turkey itself is what gobbled up most of the price increase this year. According to AFBF, a 16-pound turkey will cost about $21.57 this year at $1.35 per pound, an increase of about 25 cents per pound over last year. That triggered some misinformed columnists to start crying fowl and place the blame for the higher price on ethanol.
“Our biofuels policies are a big cause of the rising cost of food in recent years, and it just feels wrong to use food for fuel with so many families struggling to feed their families,” wrote Marie Brill of ActionAid in the Huffington Post, adding that “federal ethanol subsidies … are driving up the price of everything from eggs to milk to — yes, turkeys — and undoubtedly, some families will just have to go without.”
However, AFBF economist John Anderson says it’s more a case of basic economics – supply and demand. “Turkey prices are higher this year primarily due to strong consumer demand both here in the U.S. and globally,” said Anderson.
A more well-rounded and less emotional look at the cost of turkey comes from New York Times’ Wealth Matters columnist Paul Sullivan. “It turns out that turkey pricing is not much tied to commodities prices. Instead, other factors, like tight margins for farmers and perceptions of value, play a much bigger role,” he explains. “For most of us, the price we pay for our turkey bears little relation to what it costs to raise it.”
By the way, if you are into the organic scene, you can expect to pay double the amount for the average Thanksgiving meal, according to the Arizona Farm Bureau. The Organic Thanksgiving dinner with all the trimmings will cost $106.39, with a 16-pound organic turkey at $63.84 or $3.99 per pound. But really, even that is a bargain at just over $10 per person.
So, gobble up and give thanks this week for the most abundant and affordable food supply in the world.
This week, the world population hit exactly 7 billion (give or take a few million), coincidentally celebrated by the United Nations on the eve of All Hallows Day, better known as Halloween. The better to scare you with, my dear.
The milestone was marked by hundreds of scary stories predicting the end of the world as we know it, since people are nothing but consuming zombies who are taking over the planet. The primary ways to prevent the inevitable collapse of the entire earth are to stop eating meat and stop using corn for ethanol – preferably stop growing corn – and stop making more people.
In a world where people are seen as a burden, there is little mention of the potential of the seven billion souls they represent. The potential to maintain our precious planet and feed the souls that inhabit it lies in the hearts and minds of those billions. Rather than being afraid that there will not be enough for everyone, we should be excited about the future to see what new and better ways will be devised to produce food.
Seven is a number that traditionally represents the infinite. The potential of seven billion souls is indeed infinite.
In a world of splashy magazine covers and sexed-up headlines, it can be easy to obscure the facts with so-called data. Correlating figures to create data may sounds simple, but in choosing how to present the aggregated collection and conclusions of research, the data suppliers become the gatekeepers to the truth. To effectively assess the validity of the information, it is imperative to know exactly how they paint the picture that colors our perceptions.
In the case of U.S. Department of Agriculture figures on corn usage, government categories are obscuring reality and, in doing so, fueling food-versus-fuel panic based in incomplete information and, sometimes, intentionally obtuse interpretations. Now, the National Corn Growers Association wants to help the public understand what agricultural experts already know- corn used in ethanol production actually creates both feed and fuel.
Notably, this third is not reflected in corn usage data released by the agency. Instead, the total sum is attributed to ethanol with no accounting for the addition of high quality feed products that enter the livestock sector post-production.
“People get a little hysterical about the food vs. fuel,” said NCGA CEO Rick Tolman. “They believe that we are taking corn away from livestock producers.” That’s not the case, however. “The big difference is the pie is growing. Those pieces that have been going for feed and food are still there—they are not any smaller—it’s just that the pie got bigger.”
As in so many cases, the truth calms fears based in a lack of knowledge. Instead of perpetuating the pandemonium, realize that sensationalized stories sell magazines without regard for their impact upon the country. Buying into the mass hysteria only harms both farmers and the industry providing a domestic, renewable, sustainable fuel for the United States. Take a look at the broader picture instead of being blinded by skewed stats.
Probably because they know that “curtailing” policies created to promote domestic, sustainable, renewable energy will fatten the wallets of their benefactors, not the animals they feed. If these poultry pushers and meat marketers have their way, the production of corn-based ethanol will cease altogether.
Not only would this flood the market with unsustainably cheap corn, it would impact what consumers pay at the pump. In modern America, almost every citizen relies on motorized transit, be it public or private. As studies have shown , without ethanol consumers will pay more for every gallon of fuel thus negating grocery aisle savings.
Higher fuel prices impact more than the cost of filling up the family car. Nearly all goods purchased in the United States are transported to the final point of sale from another destination. Higher fuel prices mean that each of these products will reflect the increase. By channeling all corn from ethanol production, they would have us trade a more reasonable fuel cost felt throughout the economy for momentary meat savings. But then again, poultry and meat are trucked to grocery stores too.
Addressing fallacies about food prices, water use and greenhouse gas emissions, Forrest Jehlik shows clearly how the many misconceptions that plague ethanol have no scientific basis. Backed by Argonne’s laudable reputation for scientific excellence, his statements provide the direct, clear facts.
Noting that the 900,000 barrels of ethanol the U.S. produces per day is equal to our Nigerian oil imports and “within striking distance of the amount we import from Venezuela or Saudi Arabia,” Jehlik gives strong reasons to reexamine our view of ethanol itself and of the policies and regulations aimed at this amazing industry.
By now, the number 9,000,000,000 has burned itself into the brains of everyone in agriculture. That’s the number of people the world is estimated to hold by the year 2050. And the constant refrain is “How are we going to feed them?”
However, it’s not a question of how much food we can produce. Enough food is already produced in the world today for everyone to be properly nourished and lead a healthy and productive life. In fact, as the UN’s Food and Agriculture Organization (FAO) reported recently, we actually waste about one third of the food produced in the world for human consumption every year, approximately 1.3 billion tonnes. Obviously, that is much more than the amount of corn that is used for ethanol that makes critics scream about using food for fuel.
Hunger is caused not by lack of food, but by poverty, and one way to alleviate the poverty could lie in the production of both food and fuel, especially in developing countries. Two days after its report about food waste, the FAO released another report on the potential benefits of growing energy crops in poverty-stricken areas.
According to Heiner Thofern, who heads FAO’s Bioenergy and Food Security, “investment in bioenergy could spark much-needed investment in agricultural and transport infrastructure in rural areas and, by creating jobs and boosting household incomes, could alleviate poverty and food security.”
“FAO has been saying for years that under-investment in agriculture is a problem that seriously handicaps food production in the developing world, and that this, coupled with rural poverty, is a key driver of world hunger,” says Thofern. “Done properly and when appropriate, bioenergy development offers a chance to drive investment and jobs into areas that are literally starving for them.”
This concept was echoed by a couple of experts on a National Biodiesel Board webinar Tuesday. Both Dr. Stephen Kaffka of the University of California/Davis Department of Plant Sciences and Keith Kline with the Center for Bioenergy Sustainability at Oak Ridge National Laboratory talked about how the world can and should produce both food and fuel.
“Biofuel feedstocks or residue use should be considered from a cropping system’s perspective and not just as separate enterprises,” said Kaffka. “It isn’t really a food versus fuel issue but rather a more efficient and environmentally sound cropping system versus those that are less so.”
Kline believes that bioenergy done correctly on a global scale could do much to address food insecurity and poverty. “If we can alleviate poverty, we can probably alleviate a lot of food insecurity,” he said. “Some people in Africa have looked at this and concluded that bioenergy is not only compatible with food production but it could also greatly benefit agriculture in Africa.”
Kline says farmers he has talked to in developing countries want to feed their families and have something they can sell. “If they can grow something that’s good for food, and fuel, and fodder and feed, and anything else that you can imagine, it’s all the better,” he added.
National Corn Growers Association Ethanol Chair Keith Alverson says what ethanol has done for American agriculture and the economy can be done globally as well. “Farmers know that ethanol has a measurable and positive impact on communities, which is greatly needed in today’s economy,” said Alverson. “However, it is nice to see more of the world starting to realize what we’ve been saying and showing for quite some time.”
Farmers in the rest of the world have as much potential to help feed and fuel the planet as American farmers and will if they are given the opportunity.
Indeed we should and the Canadian farmers’ reasoning is pretty much what American corn growers have been saying for several years now.
As farm yields climb and investments are made in farm production in the developing world, feeding and fueling the world can even be done cost effectively. “My corn yields have increased by 35 percent since I started farming in 1975,” says Don Kenny who farms just outside of Ottawa and is the chair of Grain Farmers of Ontario. “I am confident that my land will continue to be productive and that new products and technologies will ensure my family supplies our local livestock market and the ethanol plant down the road for many years to come.”
The study found that global grain production has increased by 1.5% per year over the past 20 years, more than the 1.1% per year food demands are growing, according to the Food and Agriculture Organization of the United Nations. “Quite frankly, it is a relief for us to learn that production of biofuels, like ethanol, here in Ontario makes such a positive contribution to our environment without any notable impact on overall food prices and the world’s ability to supply food,” says Barry Senft, CEO for Grain Farmers of Ontario.
It would certainly be a relief for all ethanol producers if this did mark the end of the whole food vs. fuel debate, but I doubt if anyone is ready to write that obituary just yet.
Corn stocks may be a little tight right now, but National Corn Growers Association CEO Rick Tolman thinks that is probably a short term situation.
“Still our biggest challenge is that we can overproduce the market,” Tolman said during an interview after his presentation at the National Ethanol Conference on Monday. “Farmers respond to incentives, there’s an incentive right now to produce. I can guarantee we’ll have a big crop in 2011.”
Tolman makes that confident prediction after an informal survey of the NCGA farmer board members, who are mostly ahead of the game right now as far as being ready for spring planting, compared to where they were a year ago. “We had a great fall, farmers got their crop out of the field, they did their fall tillage, they did their application of inputs. We’re coming into the season in about as perfect a condition as you can have,” he said, adding that odds favor significant yields in 2011 and a larger carryover in 2012.
Rick also gives a preview of the upcoming Commodity Classic in this interview:
Food prices did not go up much in 2010 and anticipated increases for the remainder of the year and next should also be about 1 percent, according to the US Department of Agriculture’s Economic Research Service.
Ephraim Leibtag, of ERS, says food prices should remain weak and fairly stable across the board even into 2011 when a food price increase of 2 to 3 percent is anticipated through next spring. This is on a par with historical norms, he says, noting that modest inflation is actually a positive indicator of an improving economy.
The irony of the release of the USDA data and video was not missed by those in agriculture who were troubled by comments yesterday coming from what was billed as a global leadership conference. Speaking in Naples, Florida Ian Goldin of Oxford University blamed corn prices and increased ethanol usage specifically for higher food prices.
Goldin, a former vice president of the World Bank, proved to be the loosest cannon on the conference’s energy panel at what was billed as a global leadership conference. “Former” is the key word in his title here because it was a bogus World Bank report that set off the food vs. fuel media hysteria in 2008 that tried to finger corn and ethanol for higher consumer prices.
World Bank later recanted saying that the report was mistaken and not properly fact-checked, and it was soaring petroleum prices and wild speculation in the markets topping the list of food price drivers. Apparently Mr. Goldin missed the memo.
Given the rational and thorough debunking of the original World Bank report and their own weak but transparent apology it is bad form for this so called global leader” to continue to disseminate this drivel. It is unthinkable that he did so in such an irresponsible and incendiary manner blaming corn ethanol for causing “people to die of starvation.”
“The quality and variety of food produced for our dinner tables on America’s diverse farms and ranches sets us apart from our contemporaries around the world,” said AFBF President Bob Stallman. “It is an honor for our farm and ranch families to produce the food from our nation’s land for family Thanksgiving celebrations.”
This week, the world population hit exactly 7 billion (give or take a few million), coincidentally celebrated by the United Nations on the eve of All Hallows Day, better known as Halloween. The better to scare you with, my dear.
Hunger is caused not by lack of food, but by poverty, and one way to alleviate the poverty could lie in the production of both food and fuel, especially in developing countries. Two days after its report about food waste, the 
That’s what the organization heralded this week with the release of a new report on 
Corn stocks may be a little tight right now, but 