Thursday, June 21, 2007

The Price of Corn: Who's Crying Now?

You didn't exactly see Americans rise up when we learned that diverting corn into ethanol production was literally taking the tortillas out of the mouths of hungry Mexicans.

But look who's crying the blues now over the price of corn!

Coca Cola has joined Pepsi, Kellogg's and all manner of pork and beef producers to protest an energy bill pending in the U.S. Senate that would require massive new production of ethanol from corn and other sources.

The Senate bill, aimed at maintaining our happy motoring lifestyle by substituting for foreign oil, would require the usage of 36 billion gallons of biofuels by 2022. Current law requires motorists to use 7.5 billion gallons of biofuels by 2012, a target that will be surpassed in coming months as dozens of new ethanol plants come on line, according to a a report in the Des Moines Register.

The rapid push to make ethanol from corn has resulted in a doubling of the price of corn. That concerns food giants such as Coke and Pepsi, who sweeten their beverages with high fructose corn syrup (linked to childhood obesity, by the way). Cattlemen and pork producers are also feeling the pinch, of course, because corn (the production of which is subsidized by the federal government using our tax dollars) is a primary feed for cattle and pigs.

Businesses that supply corn-based feed to pig farmers in Iowa are concerned that the spike in corn prices could put some of their customers out of business.

The coalition of food businesses has written the Senate warning that the new ethanol mandate could increase “soil erosion, water pollution and habitat destruction.”

The Washington Post reports that food prices are indeed rising. Cattle prices have risen from about $82.50 per 100 pounds a year ago to $91.15 today. The cost of rounded cubed steak at local Harris Teeters is up from $4.59 last year to $5.29 this year, according to TheGroceryGame.com, which tracks prices. The Palm restaurant chain recently raised prices as much as $2 for a New York strip. And so on.

"Anybody that knows anything about the marketing of corn knows that when you raise the price of corn you are going to create problems in all of the markets that use corn," said Ronald W. Cotterill, director of the Food Marketing Policy Center at the University of Connecticut, according to The Post.

Meanwhile, a panel of scientists convened by the U.S. Environmental Protection Agency has confirmed what we pretty much knew already: A huge dead zone of oxygen deprived waters in the Gulf of Mexico in caused by crop nutrients (e.g. fertilizers) being washed down the Mississippi River from the nation's farmlands.

The scientists warn that ethanol production promises to make the problem worse. The "extreme rapid growth of grain-based ethanol production has major water quality implications" for the Mississippi River basin and the country, the panel reported.

Meanwhile, writers partial to corn have jumped to the defense of corn-based ethanol production. But environmentalists are having none of that. For a comprehensive, point-by-point rebuke of the whole corn ethanol fiasco, read this piece in Gristmill. It's worth sending to friends and posting on the refrigerator door.

Now, can we talk about public transportation?

4 comments:

Anonymous said...

Oh wow, I don't think it is possible for this post to be anymore one-sided. Did you do any research at all or just spew what you hear from others?

Ed Bruske said...

I'm all ears. Let's hear your side...

deliberately said...

Great post. I was completely unaware of this. As for the anonymous comment, I'm surprised that just because they visited your site they expected you to be "fair and balanced." As for my site, it's not intended to be "fair and balanced." I've got a particular position and push for others to understand it.

Keep doing the same.

Ed Bruske said...

Thanks, deliberately. I think of what I do more as connecting the dots than researching a graduate thesis. Mr. Anonymous should leave his name and stand by his convictions...