Across the country, ethanol plants are swallowing more and more of the nation's corn crop. This year, about a quarter of U.S. corn will go to feeding ethanol plants instead of poultry or livestock. That has helped farmers like Johnson, but it has boosted demand -- and prices -- for corn at the same time global grain demand is growing.
And it has linked food and fuel prices just as oil is rising to new records, pulling up the price of anything that can be poured into a gasoline tank. "The price of grain is now directly tied to the price of oil," says Lester Brown, president of Earth Policy Institute, a Washington research group. "We used to have a grain economy and a fuel economy. But now they're beginning to fuse."
The words are from the fourth and penultimate article in the Washington Post series on the Global Food Crisis. This is entitled Siphoning Off Corn to Fuel Our Cars and is subtitled "As farmers feed ethanol plants, a costly link is forged between food and oil." That cost may be more than the world - and humanity - can bear.
If you have not been following this series in the Post, or my diaries, this is also my fourth diary on the series. You can read the previous articles in the Post at this link. You can also click on my user name, go to my user page, and read the three diaries I previous wrote on this series, as well as the related diary on did on the crisis created by the spread of a new variety of wheat stem rust.
The important thing to realize about what is happening with corn-based ethanol is to recognize that it is a direct result of actions by our government, and that these actions cannot be blamed on one party. The article reminds us that in 2005 the President and the Republican-held Congress backed a bill requiring wide-spread use of ethanol in motor fuels.
Just four months ago, the Democratic-led Congress passed and Bush signed energy legislation that boosted the mandate for minimum corn-based ethanol use to 15 billion gallons, about 10 percent of motor fuel, by 2015. It was one of the most popular parts of the bill, appealing to farm-state lawmakers and to those worried about energy security and eager to substitute a home-grown energy source for a portion of U.S. petroleum imports. To help things along, motor-fuel blenders receive a 51 cent subsidy for every gallon of corn-based ethanol used through the end of 2010; this year, production could reach 8 billion gallons.
Other parts of our economy, especially agriculture, are already feeling the impact, as, for better or worse, corn has served as the basis of feed for much of our production of meat, eggs and poultry. Tyson Foods suffered a loss after seeing its corn and soybean costs rise by $600 million, and the wholesale price of eggs are up 40% in one year. And if you don't understand why soybeans, as the availability of corn for feed diminishes it also puts price pressures on other crops used in the feed process. And the price pressures are so great that each penny increase in the cost of a bushel of corn costs the livestock industries in Texas $6 million.
The use of ethanol was justified at least in part because of the argument that it would help clean the atmosphere, producing less of an emissions problem than burning gasoline, for example. But
a study published in Science magazine Feb. 29 concluded that greenhouse-gas emissions from corn and even cellulosic ethanol "exceed or match those from fossil fuels and therefore produce no greenhouse benefits." By encouraging an expansion of acreage, the study added, the use of U.S. cropland for ethanol could make climate conditions dramatically worse. And the runoff from increased use of fertilizers on expanded acreage would compound damage to waterways all the way to the Gulf of Mexico.
Like the previous three articles, this one spreads over 4 electronic pages on the Post website. I have not yet reached the bottom of the first. And if you are shocked by what you have already read, to quote from Al Jolson, "you ain't seen nothing yet."
Yesterday A Siegel responded to a comment I made on his diary by noting that our current grain-based ethanol probably gained little in net energy savings because of the cost of transportation - first of the grain to ethanol plants, and then the finished product by truck. Of course, most ethanol plants are in the corn belt, so the transport cost at the front end is rather minimal. Still, one might hope that the cost of moving the finished product might limit how long we use this method as a transition to something better. Except we learn in the article today that massive investment is being made in infrastructure. Iowa already has28 corn-based ethanol plants consuming 1/4 of its crop, with several dozen more in planning or under construction, and two oil pipeline companies are exploring the possibility of building a $3 billion pipeline for ethanol linking the Midwest producing areas with consuming areas in the East that
would carry 3.65 billion gallons a year and give another industry a vested interest in maintaining high ethanol output. Because of this domestic demand, Iowa's exports of corn are expected to shrink to less than half of current levels in the next couple of years. Nationwide, corn stockpiles are dwindling.
These infrastructure commitments might lock in a demand for corn that would continue to keep the price high and the availability for food purposes low at the same time as the world demand for food corn was increasing. While farmers and ethanol producers might benefit, the impact on others has the potential to be catastrophic.
There are those who argue that people like Lester Brown who are focusing on the problems of corn-based ethanol are simply wrong, that the issue is overblown. They will note that the percentage of the budget of the average American devoted to food has dropped substantially over recent decades, to a level half what it was in the 1950s. And 80% of that money goes to people other than farmers. Further, we will hear arguments from people like Don Endres, chief executive and 20% owner of a major ethanol processor, himself having grown up on a farm, who argue the impact on food and agriculture is overstated:
Endres says ethanol plants aren't to blame for high corn or food prices. He notes that the corn used to make ethanol isn't the kind that people eat anyway. Moreover, he says, ethanol plants like VeraSun's extract the starch in corn for fermentation while producing a dry feed that contains protein and nutrients. Piles of it are collected from industrial dryers at the plant. VeraSun then sells that feed, known as dried distillers grain, back to farmers who raise animals. Much of it goes to Texas, Mexico and China; it accounts for about 15 percent of VeraSun's revenue. When the grain is mixed with inexpensive starch, such as alfalfa, farmers can save money, Endres says.
Finally, he says, yields on corn will continue to increase so that the current acreage will be able to meet both food and fuel demands. His grandfather got 40 bushels to an acre, his father got 80, and his brothers get 160. Someday, Endres says, farms will get 300 bushels an acre.
I find several parts of the argument silly. Let me focus on only one. Even if it is a different kind of corn that would otherwise be grown for food and feed production, it still represent a removal from food - that is, the acreage that had been used to grow food corn is now used to grow corn for ethanol, so it still represent a reduction of availability for purposes other than ethanol. And even though there is still some residue than can be fed back into producing animal feed the experience in Texas is still one of a serious increase in the cost of feed. Of course, if this were to lead to a move away from grain-fed meat there might be some benefits that would accrue, both in health and in the use of fuel to produce the grain used for such purposes, but so far that is not happening, nor, given our seemingly insatiable desire for the heavily marbled meat that results from grain-feeding, does it seem likely to in the foreseeable future.
Further, farmers disagree with Enders' assessment about the dry grain feed that he says can still be used. Not far from Enders' main plant are two neighbors who raise 15% of the nation's capons, and who are passing on the additional feed costs to their customers: 10 cents per pound last year and an additional 15-20 cents per expected this year.
I want to quote part of a paragraph where one of these neighbors disagrees with Enders, and which has an add-on line which I will place in bold to make sure you don't miss it. The man says that
capons, like egg-producing chickens, can digest only limited quantities of the dried distillers grain. And the price of that protein-rich feed is also rising. (Cattle, which have four-chambered stomachs, can digest the distillers' grain more easily.) Some studies have also linked dried distillers grains with the bacterium E. coli in feedlot cattle.
There is much more detail in the article - about farmers who no longer rotate fields between corn and soybeans, thereby further draining the soil of nutrients. Or they buy or lease land overseas to grow more, and when that savanna is planted it releases the carbon dioxide previously stored in organic matter into the air. Perhaps to gain greater yield of corn in the same fields the farmer tills his soil more frequently, with concomitant soil erosion and other problems.
There is also a sidebar article entitled In India, Even Gods Are Going Hungry, with the explanatory subtitle "Poor Struggle to Donate to Temples as Food Prices Skyrocket." I won't address the issue of cultural change that is occurring as a result of rising food prices - it is not worth the flame war that might result. But I think it worth noting from that sidebar the following:
The U.N. World Food Program has said that more than 100 million people are being driven deeper into poverty by sharply rising food prices, which have sparked riots and protests from Bangladesh to Egypt. The crisis is serious in India, where nearly half the children younger than 3 are undernourished, a higher rate than in sub-Saharan Africa, according to UNICEF, the U.N. agency for children.
Remember, India is a country part of whose economy is booming as high tech jobs are moved from the US to the subcontinent thanks to the flexilibity provided by high-speed internet connections. The wealth is not trickling down. And what we do with our corn has implications world-wide, as can be seen in one more paragraph from that sidebar:
Victor Aguayo, the chief of child nutrition and development at UNICEF's New Delhi office, said the agency was investigating the full extent of the impact of price increases on children and women. Already, he said, officials know prices are escalating at rates they have never before seen.
That is because not only is grain rapidly increasing, it causes additional costs in things as basic to survival as milk.
The discussion on my previous diaries on this series have been extensive. They have at times been enriched by the comments of those who have personal expertise in matters of agriculture and energy that I acknowledge are not part of my repertoire. In writing these diaries I make no claim to knowledge that I do not have.
But what each of us can do is to examine the role we play in contributing to what may be a crisis so great that the damage that it does hold the potential for real catastrophe. I mentioned farmers planting in what had previously been savanna, and the CO2 implications of doing so. As the demand for grain goes up and the profits increase we are likely to see increasing amounts of land not previously being farmed subject to the plough. Sometimes to clear the land trees and rain forest will be destroyed, and the quickest way of making the land available for plowing or even for grazing is to burn the vegetation already present: I think you can quickly realize the costs of taking such an approach.
Ultimately all of us will have to recognize that what we do as individuals will be insufficient, even though still absolutely necessary. First and foremost, the world has to stop its explosion of human population: what we have now is probably not sustainable over the long term, even at levels of consumption far below what those of the average reader of this blog. We certainly have to be more efficient in our use of energy, less wasteful in the use of water and air, and of food. The profit motive cannot be the sole driver in making decisions whose impact is far more than economic. And we cannot insist that our government take actions that we are unwilling to initiate in our own lives insofar as we have the power to do so.
I am not a philosopher. I hesitate to speak as a moralist. And yet I find it necessary to speak and write, to read and pass on what I read, to ask and to challenge. In the process I hope I learn from the wisdom, experience, and insight of others. And further, my writing something like this forces me to examine my own life and how I use the things of this world. I would rather not convict myself of hypocrisy by writing passionately about a subject that I am unwilling to implement in my own choices.
I hope this series of diaries has served a useful purpose. I have benefited from the conversations that have ensued on the threads. And I certainly have benefited by reading the material in the Post. I hope - and, yes, pray - that we may all consider how our lives and actions intimately connect us with people all around the world, that simple actions here can have profound implications thousands of miles away.
For me this is a moral issue. And thus it is also political. It is something that I must consider as part of any political action I take, of any political decision I make.
I cannot speak for anyone except myself. I can and will speak out and write, as this week I have been doing, in the hope that perhaps someone wiser and more insightful and certainly more persuasive than am I can take the next steps so essential if we are going to begin to solve this crisis.
Peace.