Can U.S. farmers keep filling the nation's bellies as they scramble to fuel its cars?
Given its evident gravity, the question has drawn remarkably little
debate. Like it or not, though, more and more food is being devoted to
fueling the nation's 211-million-strong auto fleet. High gasoline
prices, a dizzying variety of government supports, and an investment frenzy have caused corn-based ethanol production to more than triple since 1998.
As recently as a year ago, corn seemed wildly overproduced. Suddenly,
it's a hot commodity. In 1998, about 5 percent of the corn harvest (526
million bushels) went into ethanol production, according to the National Corn Growers Association. This year, the U.S. Department of Agriculture expects ethanol producers to use upward of 2 billion bushels, or nearly 20 percent of the crop.
And ethanol's voracious appetite for corn isn't expected to abate anytime soon. According to the pro-ethanol Renewable Fuels Association,
109 ethanol refineries currently churn out 5.3 billion gallons of
ethanol a year -- and an additional 56 plants (plus expansions at seven
existing ones) have broken ground. When these new plants are on line,
the industry's capacity will nearly double, to 9.7 billion gallons a
Presumably, its demand for corn will nearly double, too -- and that means higher food prices for consumers.
Corn Hits a Ten-Year High
For most of the past five years, steadily rising ethanol demand has had little effect on corn prices. Bolstered by generous subsidies, corn farmers churned out more than enough product to satisfy demand from ethanol plants while holding prices steady.
This year, though, after the gasoline industry abruptly abandoned MTBE
and embraced ethanol as an oxygenate enhancer, ethanol demand spiked,
and the price of corn finally followed suit. A bushel of corn currently
fetches about $3.45 -- a ten-year high that leaves last year's low of $1.50 in the dust.
Considering that corn suffuses the U.S. food system -- it's the main
feed for beef, poultry, egg, dairy, and hog production, and provides
sweetness for candy, cereal, soft drinks, and other supermarket staples
-- its price can't suddenly jump without causing repercussions. In the
early 1970s, a sudden spike in grain prices quickly upped the cost of
meat, making it a luxury even for many middle-class families.
(Hamburger Helper, anyone?)
Tyson Foods, the world's largest meat and poultry processor, has already signaled
that a similar scenario might be on the way now. "I believe the
American consumer is going to have to pay more for protein," Tyson CEO
Richard L. Bond recently told investors. "Quite frankly, the American
consumer is making a choice here ... either corn for feed or corn for
Elsewhere, The Wall Street Journal recently explained succinctly
why poultry prices will soon reflect corn's new popularity as a fuel
source. Because of higher corn prices, "It costs nearly a nickel more
to produce a pound of chicken today than at the end of 2005, yet the
20-year average industry profit margin per pound of chicken is two
cents. This means poultry producers either will have to raise prices or
slash other costs."
It should be noted that any farmer who has survived the last 20 years
in the poultry business has already slashed costs to the bone; higher
prices seem inevitable. And adding a nickel a pound for whole chickens
at the farm level will ripple up the food system, translating to higher
increases on the supermarket shelf.
The Boom Heard 'Round the World
While the industrial-food system is easy to criticize, it's important
to recognize that vast numbers of people rely on it for cheap
sustenance. For more than 30 years, real growth in average wages has,
at best, floundered. According to University of Massachusetts economist
Robert Pollin's Contours of Descent: The Economic Consequences of Clinton, Bush, and Greenspan,
real hourly wages peaked at $15.73 in 1973 and by 2000 stood at $14.15
(in 2001 dollars). And that was after a rare three-year growth spurt
provoked by the stock-market bubble; since 2000, wages have essentially
Not surprisingly, tens of millions face what the USDA calls "food insecurity,"
which the agency defines as the condition of households being
"uncertain of having, or unable to acquire, enough food to meet the
needs of all their members because they had insufficient money or other
resources for food."
In that context, the federally funded effort to divert billions of
bushels of corn into ethanol with scant public debate seems cavalier.
Moreover, the pattern of booming biofuel production driving up
feedstock prices is also taking root in developing countries -- where,
the U.N. Food and Agriculture Organization claims [PDF], some 800 million people face persistent hunger and malnutrition.
In a blunt report last week, The Wall Street Journal vividly illustrated
the effect of booming European demand for biodiesel on Southeast Asian
palm-oil production. Prices for the tropical fat have jumped more than
30 percent in 2006, spurring rapid deforestation as landowners scramble
to plant more palm, the Journal reports.
Meanwhile, Brazil's successful sugarcane ethanol program has inspired
copycats -- and a rally in sugar prices. Sugar prices recently came off
25-year highs, but that's only because growers in other areas are scrambling to plant cane and thus increase supply. According to the Journal,
"In India, environmental activists say, water tables are dropping as
farmers try to boost production of ethanol-yielding sugar."
Deforestation, falling water tables -- these are hardly the hallmarks
of a fuel source that can reasonably be called "renewable," much less
an agriculture strategy designed to maintain food-production capacity.
And rising prices for food commodities, without other social reforms,
will only translate to more misery for the global south.
Already, the FAO is sounding the alarm. The agency claims
that world grain prices are at ten-year highs in part because of
"fast-growing demand for biofuel production." These high prices, the
cause "dismay [for] many developing countries that rely on the
international market to meet their staple food needs," many of which
will "reduce food purchases, not always in response to their own
improved domestic supplies but rather because of the high international
Covering Every Inch
Here in the United States, cellulosic ethanol, which could
theoretically utilize non-food crops such as switchgrass, is often held
up as the panacea for a truly green biofuel that needn't have much
effect on food prices.
Yet the process for extracting sugars from cellulose remains, 30 years since the government first started investing in research for it, just beyond the grasp of viable commercial-scale production. USDA chief economist Keith Collins recently told Congress not to expect significant fuel contributions from cellulose for "some years into the future."
In that testimony, Collins articulated the official response to reining
in food prices as ethanol production booms: grow more corn. That's a
bracing strategy in a nation that already produces 42 percent of the world's supply of the crop.
Because of the ethanol boom, "The United States will need substantial
increases in corn acreage to prevent exports from declining and
livestock profitability from falling," Collins declared. He reckoned
that by 2010, the 80 million acres currently devoted to corn would need
to expand by an additional 10 million acres to meet rising demand for
ethanol. Where to find them? Collins points to the Conservation Reserve Program, the 36 million acres of marginal, environmentally sensitive land the government now pays farmers to keep fallow.
Moreover, per-acre corn yields -- driven by copious dousings of
fossil-fuel-derived fertilizers, genetically modified seeds,
pesticides, and investments in heavy farm machinery -- must rise, from
about 148 bushels per acre in 2005 to 155 bushels by 2010, Collins
Even with these measures, Collins predicts, corn prices will likely
"set new record highs over the next five or six years." And he
acknowledges that the strategy will offset little fossil-fuel use.
"Corn ethanol alone," he told Congress, "cannot greatly reduce U.S.
dependence on crude oil."
Mano a Monocrop
Given the environmentally ruinous nature of corn production, the economist Collins presents an odd plan for clean energy.
Indeed, squeezing yet more corn from the land to make a relatively
small amount of auto fuel might not even deliver a net reduction in
greenhouse gases. Michael B. McElroy, professor of environmental
studies at Harvard, recently wrote
that "the reduction in net emissions of carbon dioxide obtained by
using corn rather than petroleum as a 'feedstock' for motor fuel is
largely offset by additional emissions of the several hundredfold more
potent greenhouse gas, nitrous oxide, formed as a byproduct of the
nitrogen fertilizer used to grow the corn."
Such a corn-centric strategy might even impede our ability to grow
food. Blanketing even greater swaths of the Midwest with ever-intensely
cultivated, monocropped, chemically reliant corn plants seems like a
recipe for further degrading the nation's richest store of topsoil.
Yet current public policy is pushing us decisively in that direction.
In his exhaustive study of the complex array of biofuel subsidies, Doug
[PDF] that total government support for ethanol will soon reach between
$6.3 billion and $8.7 billion. (In fiscal year 2005, by contrast,
Amtrak received $1.2 billion in federal funding.)
Despite the gargantuan annual outflow of government cash, public
discussion of the ethanol question has been muted. In the last
election, the political debate centered on which of the two major
parties embraced ethanol more.
That must change. Hinging so much of the U.S. food system on monocropped corn agriculture was always a dubious decision.
Extending corn's domain to the nation's gas tanks compounds the error,
and can hardly be counted on to provide a sustainable supply of food or
With food prices rising and environmentally sensitive land in the U.S.
and the global south alike going under the plow to plant fuel crops,
it's time for a blunt international debate on the wisdom of biofuel.
Grist staff writer Tom Philpott farms and cooks at Maverick Farms, a sustainable-agriculture nonprofit and small farm in the Blue Ridge Mountains of North Carolina.
Feeding the Beast: It's Time for a Real 'Food vs. Fuel' Debate
By Tom Philpott
Grist Magazine, Dec 13, 2006
Straight to the Source