In June I wrote a column explaining that the world is beginning to question its enthusiastic embrace of ethanol produced from corn. One of our readers commented that I was being unfair to corn-based ethanol because I blamed it for the rise in food prices when there were other market factors at play.
He was absolutely correct –– there are many market factors at play, and no one can say exactly how much of the increase in food, cattle feed, clothing and transportation costs is due to the use of corn-based ethanol. But it has a significant effect.
The reader and I both agree that corn-based ethanol is not a good long-term biofuel because it interferes with our cattle and human food supplies. In Missouri the 10 percent ethanol mandate has been at least partially responsible for a doubling of cattle and chicken food prices over the last two years.
One large chicken feeding operation recently announced it will cease operations because it can no longer sustain profitability. Cattle are now being fed grass instead of corn, and that may actually be a benefit since the meat will be leaner. But my guess is the meat yield will be decreased significantly.
I might also mention I took an ex-tended trip recently in the old family truckster. The Missouri-mandated 10 percent ethanol blend caused a 5 percent fuel economy penalty over straight gasoline. This 1.2 mile-per-gallon decrease agreed exactly with my theoretical calculations. I suppose the real issue here is: Does the re-duced mileage due to 10 percent ethanol more than offset the reduced cost of fuel?
Do any of you recall the late Warren Zevon’s song, “Lawyers, Guns, and Money”? The second line of the song states “the **** has hit the fan.” Missouri’s 10 percent ethanol mandate is sparking investigations into the ethics of the governor, his brother, and his congressman uncle. Alleged-ly, they influenced Missourians to accept the mandate so the politician’s brother, who was heavily invested in ethanol plants, could prosper.
The politician has decided not to run for reelection. The two candidates who are now running for his job have taken opposing views on ethanol. One candidate wants to support the status quo. The opponent wants to open an investigation into the ethics of the politician and his uncle –– and also prefers a repeal of the 10 percent ethanol mandate so that Missouri’s economy can rebound from the deleterious effects of high corn prices. The ethanol has hit the fan!
Corn-based ethanol supporters say that rising farm/food prices are due to increased fuel costs, not rising corn costs. I’m sure that rising diesel costs are a factor here, just like they are in trucking. But if fuel costs are solely responsible for food cost increases, why haven’t the prices for vegetables and meat risen as high? I’ve often heard this argument proposed by several government agencies in support of our federal biofuels legislation, but the facts do not support the conclusion.
Corn-based ethanol supporters also argue that increased exports of corn to other countries is responsible for the high feed and food prices. Again, the facts don’t support the conclusion. It is true that our exports of all farm products are up 25 percent over last year. This is probably driven by the decreasing value of our currency. But vegetable and meat prices haven’t increased significantly, while corn prices have gone through the roof.
As I’ve stated previously, the longer-term ethanol solution is to produce ethanol from cellulose or other waste materials. I just hope our scientists are given sufficient re-sources to accomplish this quickly. The 2008 federal ethanol mandate is already requiring 1/4 to 1/3 of the corn we produce. We cannot continue to rely on corn-based ethanol without significantly hampering our economy.
