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Jul 16, 2009 11:49 AM | 9
Corn-based ethanol production continues to rise; U.S. farmers planted 87 million acres of corn this year—two million more than the U.S. Department of Agriculture (USDA) had initially estimated in March. This news has driven down corn market prices, leaving farmers skeptical about the theory that ethanol production has caused a corn shortage and in turn inflated food prices in the U.S.
The U.S. is the world's largest producer of both corn and ethanol, surpassing Brazil in the latter category in 2006. Since 2002, the year ethanol production began rapidly increasing in the U.S., the rate at which food prices increase has doubled (an increase of $46 per week for a family of four from 2002 to 2009, compared with an increase of $23 per week for the same family over the prior seven-year period). These simultaneous increases in food costs and ethanol production have left many people concerned over a potential shortage of the grain. The current market prices, however, undermines the correlation between ethanol production and a shortage of the grain.
Still, many challenges remain regarding the practicality and desirability of corn-based ethanol production. Increased fertilizer use to grow more corn may elevate levels of ground water contamination. Not enough machinery exists to harvest all the available corn biomass, not just the kernels. And the U.S. Environmental Protection Agency (EPA) estimates that ethanol is four percent shy of the Energy Independence and Security Act requirement that the energy source reduce greenhouse gases by 20 percent compared with the level of greenhouse gases that would have been emitted without the technology.
Image of farmers harvetsing corn by creischl via iStockphoto
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9 Comments
Add CommentHas the rate of world hunger changed, too?
Reply | Report Abuse | Link to thisWrong. The large global recession has caused the price drop in grain, not an excess supply of it. Gas prices have also fallen. Are we now experiencing a glut of oil, as well?
Reply | Report Abuse | Link to thisSeems entirely possible this could simply be a symptom of deflation - you know, one of the words that most pundits prefer not to utter (often accompanied by the word depression).
Reply | Report Abuse | Link to thisEthanol production causes higher demand which in turn causes higher prices than would exist in the abscence of ethanol derived demand. There does not need to be a "shortage" of the grain to prove that ethanol production is having an effect on the prices. As others have pointed out, this is a symptom of the recession.
Reply | Report Abuse | Link to thisOH COME ON PEOPLE I THOUGHT WE WERE ALL SMARTER THAN THAT!
Reply | Report Abuse | Link to thisIt's price manipulation just like Enron, don't you remember the rolling blackouts in CA? What's changed to 'fix' this issue? Nothing but the manipulation has stopped. The corn market is doing the EXACT same thing, because what's changed?
Proportionally we ARE experiencing a glut of OIL, because the main consumers (US and Europe) are driving much less.
Reply | Report Abuse | Link to thisPeople cannot, voluntarily, eat much less, the comparison is not valid.
In addition why does it have to be one or the other - it can be a mix of both causes.
We do not need any more fuel or food than we already have. Homo sapien has gone feral. Time for a natural cull. Allow the natural environment to correct the situation. Return farming lands to forests and increase the basic food production (photosynthesised foods) and biodiversity of the planet. Survival of the fittest or those just able to live long enough to procreate has ruled till an idiot species mucked thing up.
Reply | Report Abuse | Link to thisThe hard decision is control population numbers or go extinct. Energy needs/use and Carbon dioxide levels are results not drivers of planet change. Politicians will never chose to control numbers. The political system dooms our species to extinction.
On the bright side: At the end of the day, life is without purpose.
Farmers are just like everbody else, they chase prices. Last few years the price was up, so they planted more corn acres and less soybean acres. Now there is a shortage of soybeans, and that commodity is more expensive.
Reply | Report Abuse | Link to thisWe have seen this movie before. When the government gets involved, they screw things up. We have seen this in subsidies and set-aside programs and now in requirements to ethanol.
They have hosed up pork and beef beef production, dairy, corn, soybeans, sugar beets (there used to lots of sugar beet refineries - most of them are gone now)
When are people going to wake up? Oil and food prices are going to go up when there is a high demand for it. There are plenty of both around for now. Why do people complain about renewable fuels? We should be all for it. Right now ethanol is the best option. Oil companies will still complain when hydrogen fuel is being mass produced. (Let me guess.....they'll say we are going to run out of water). Grow your own food. Ride bikes. Create your own family entertainment.
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