Global Food Prices Jump To Record Level Because of Higher Corn Prices – or the alternate title: Cornholing the future
There’s lot of gloom and doom being pushed, trying to link food prices to climate change by the usual howlers. As shown above, food prices surged to record levels in February despite February wheat and rice prices being essentially flat. Yet, February corn prices are up significantly even with 2010 being the 3rd largest U.S. corn crop ever. Why? Well part of the reason is that our cars now have a mandated, growing and voracious appetite for corn based ethanol.
Dr. Roger Pielke Jr. writes:
When certain information proves challenging to entrenched political or ideological commitments it can be easy for policy makers to ignore, downplay or even dismiss that information. It is a common dynamic and knows no political boundaries. Global Dashboard catches the Obama Administration selectively explaining the causes for increasing world food prices:
“The increase in February mostly reflected further gains in international maize prices, driven by strong demand amid tightening supplies, while prices rose marginally in the case of wheat and fell slightly in the case of rice.”
“In other words, this is mainly about corn. And who’s the biggest corn exporter in the world? The United States…And where is 40% of US corn production going this year? Ethanol, for use in US car engines.”
So here we having wailing and gnashing of teeth by the usual suspects over global food prices, and they are using this as an example of the supposed “climate change drive food prices” link. Of course there isn’t any link in this case. It’s the corn stupid.
The simple solution: stop burning food for fuel, drill for more oil, work on alternate energy system that actually might work, like thorium based nuclear power.
h/t to C3 headlines
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Ethanol has only 2/3 rd the energy of gasoline and the mpg will go down accordingly.
hotrod ( Larry L ), I know you enjoy supporting government welfare for corn farmers but Dr. Pimentel’s studies have not been debunked. His studies have been supported by others,
Ethanol From Corn: Clean Renewable Fuel for the Future, or Drain on Our Resources and Pockets?
(Environment, Development and Sustainability, Volume 7, Number 3, pp. 319-336, September 2005)
– Tad W. Patzek et al.
“It is shown here that one burns 1 gallon of gasoline equivalent in fossil fuels to produce 1 gallon of gasoline equivalent as ethanol from corn. When this corn ethanol is burned as a gasoline additive or fuel, its use amounts to burning the same amount of fuel twice to drive a car once. Therefore, the fuel efficiency of those cars that burn corn ethanol is halved. The widespread use of corn ethanol will cause manifold damage to air, surface water, soil and aquifers. The overall energy balance of corn conversion to ethanol demonstrates that 65% of the input energy is lost during the conversion. Carbon dioxide sequestration by corn is nullified when corn ethanol is burned, and there will be additional carbon dioxide, nitrous oxides, and sulfur oxide emissions from the fossil fuels used to produce the ethanol. ”
Larry, “Fuel ethanol is the most cost effective octane enhancement for gasoline blending, it allows them to use less crude oil to make a gallon of fuel, therefore as the price of oil goes up, so does demand for fuel ethanol to allow the blenders to meet minimum octane requirements at the lowest possible cost.”
Really? So why does it have to be mandated and subsidized? If Ethanol was so great it could compete on it’s own. The fact is it cannot thus requires government welfare and mandates to punish consumers with higher gasoline prices.
Larry said “Several tests have been done to prove ethanol can be shipped in existing lines, and they had no problems except the ethanol picked up a lot of residue and was not longer clear and bright when it reached the delivery point making it unsuitable for sale”
But great for burning in your engine eh? What is your answer to the boaters who are now forced to use ethanol mixtures? http://www.atlanticmaritimeacademy.com/images/TI-090311-ethanol-going-up.pdf
Besides MTBE, what are other alternatives besides ethanol?
Gary from Chicagoland says: ….”2) How has the demand for ethanol increased the price of corn? Analysis from the International Food Policy Research estimates that rising demand for ethanol caused 40% of the rise in corn prices in 2007, and caused 35% of the rise in corn prices in 2008.”
The EPA used a different model to estimate price changes due to the ethanol standards back in 2008 as they stated this- “In denying Texas’s request, the EPA estimated that waiving the national mandate, which requires that the United States produce 9 billion gallons of ethanol fuel this year and 36 billion gallons by 2022, would reduce corn prices only slightly (by only seven cents a bushel).”
http://www.usnews.com/news/national/articles/2008/08/07/epa-rejects-texas-request-to-waive-ethanol-requirements-in-gasoline
Yes, it would be nice if the EPA and the International Food Policy Research group would spend a few minutes reviewing their models to see why their estimates are so different.
Another claim debunked – that ethanol cannot be transported by pipeline ….
Just one example … a simple google search of “ethanol pipeline” would show the many examples disproving this claim. Shipping ethanol in EXISTING pipelines is an issue – because as noted it requires operators to work harder because of different requirements
One of the other inconvenient facts about ethanol is that pipelines are un-necessary in many areas … across much of the US ethanol plants are located in the area the feedstock is produced, and provides finished product primarily to the local area.
With the coming switch to cellulosic – which grows almost anywhere – this model can be duplicated almost anywhere in the us.
That said – besides pipelines – ethanol can be shipped by railroad where longer hauls are necessary or needed.
1800 mile long ethanol pipeline proposed
http://www.trackforum.com/forums/showthread.php?132327
Larry,
Thank you for calmly answering with real facts the knee-jerk reaction from people who know nothing about farming.
Farmers don’t live in a libertarian-designed spreadsheet. They live in the real world. For hundreds of miles, the only salable crops are field corn and soybeans. The machinery for that is what they have several times their annual income invested in. They aren’t going to grow something that they can’t plant, harvest and sell, even if hypothetically, people could eat it. The idea that farmland in Iowa or southern Minnesota is fungible with sweet corn or tomatoes or what have you is a very ignorant notion any high schooler in the midwest could explain to you. BTW, cellulosic ethanol production is happening right now in Iowa.
ShrNfr. You forget chlorophyll, and the sun. Funny thing about water: It isn’t destroyed: there is this thing called the water cycle. Read these pages and you will learn more about that bright light in the sky, and about the water cycle.
All the Ethanol shills who support government welfare for corn farmers and are anti-consumer choice for their vehicle fuels come out of the wood-work with these threads.
Myth: Ethanol is Great (Video) (5min) (ABC News)
220mph says: “Ethanol is NOT worse for the environment – it is significantly cleaner, reduces emissions and REDUCES greenhouse gases.”
Total nonsense,
Use of U.S. Croplands for Biofuels Increases Greenhouse Gases Through Emissions from Land-Use Change
(Science, Volume 319, Number 5867, pp. 1238-1240, February 2008)
– Timothy Searchinger et al.
“Most prior studies have found that substituting biofuels for gasoline will reduce greenhouse gases because biofuels sequester carbon through the growth of the feedstock. These analyses have failed to count the carbon emissions that occur as farmers worldwide respond to higher prices and convert forest and grassland to new cropland to replace the grain (or cropland) diverted to biofuels. By using a worldwide agricultural model to estimate emissions from land-use change, we found that corn-based ethanol, instead of producing a 20% savings, nearly doubles greenhouse emissions over 30 years and increases greenhouse gases for 167 years. Biofuels from switchgrass, if grown on U.S. corn lands, increase emissions by 50%. This result raises concerns about large biofuel mandates and highlights the value of using waste products. “
The correlation is mostly incidental.
With the increased use of corn for ethanol, the planted area increased massively as well.
What makes the corn price look being influenced by ethanol production, is the simple fact, that agricultural production (at least in the developed world) and the ethanol price both depend primarily on the oil price. The oil price caused both to soar, as it did in 2007 and in 1973 and in 1980.
High food prices are the single most important factor to guarantee more food production. Who would be served, if prices are kept artificially low by governments, but not enough food available. Look at North Korea or the former Soviet block for the answer.
Finally, in the past, hunger was caused by crop failures, as mankind never produced much more food beyond expected consumption.
With the ethanol corn and the ethanol sugar cane, there is now a new, giant food reserve created, what could be highly beneficial to mankind.
Whenever needed, this crop could be diverted temporarily back to food production by a political decision.
Its pretty simple really. What is IOWA famous for Corn and being the first primary. You have to do well there to be considered a serious candidate. Change the order of primaries and I bet Ethanol would disappear in a second.
Don Shaw says:
Ethanol from cellulosic feed has failed miserably to provide the promised supply of ethanol as mandated from the EPA.
Cellulosic ethanol is in its very early stages … it was NEVER expected to provide a significant part of overall production in 2007 – or today …
The plants under construction are first version units, barely a step beyond prototype status … it will take number of years to refine and enhance the process and build an industry and a feedstock supply
It also MUST be noted – as your attached story shows – that this plant was being constructed in 2007 … we had that little old financial market meltdown followed by a collapse of the economy AND a collapse in gas prices – all of which made these early stage plants, along with many new corn plants – economically unfeasable – at least in the short term.
I;d like to be clear about a couple things as well … I am first a strong opponent of the AGW alarmism … it is undeniably clear we are due, overdue, for a glacial period … the historical records are about as clear as can be.
The historical record is I think also very clear that the temperatures of the last 10 years, 30 years, 100 years or even 400 years are well within the natural variation of the last 10,000 year historical record
I’m also not in any way related to or involved in the ethanol industry. At one point I was an ethanol skeptic. Until I did the research to try and support that position. And when you have the facts – all the facts – most of the claims against ethanol are simply not accurate. I encourage everyone to spend as much time fact checking and educating themselves about ethanol as they do about global warming issues.
hotrod ( Larry L ) says, “The reason Mexicans cannot afford to buy corn for their tortillias is because the Mexican government did not protect the small family farm from corn imports and broke the back of the small producers. Now instead of growing their “white corn” (note not the same as field corn for ethanol) in small family plots or local farms they shifted to large scale imports of their cultures staple food crop.”
By “protect” you mean the Mexican government intelligently did not punish Mexican consumers with higher corn prices by “protecting” inefficient “family” farms. You are all for government welfare for corn farmers, are anti-consumer choice on vehicle fuels and now endorse higher corn prices for Mexican consumers! Why do you dislike the poor consumer so much? Why do you want to punish them with higher prices to push your ideology?
So are the prices of corn/food rising all over the planet? Or just outside the U.S.? It seems that as a corn exporter it is the buyers that are the ones that are suffering. But didn’t the excess of corn grown in the U.S. contribute to putting farmers out of work in nations around the world in the first place? So now they decide to use the corn domestically to ease (although I’m sure only minimally) foreign oil consumption and everyone bitches that they are driving up food prices around the world. Well here in Canada I haven’t noticed any significant food increases.
MrC
hotrod ( Larry L ), “Good questions, simple answer is politics, if the EPA would get out of the way, and allow blender pumps people could choose to use what ever blend of gasoline/ethanol they want. Where blender pumps are available the most popular fuel blend is 30% ethanol.”
Why would they choose less MPG, higher prices and a limited range compared to Gasoline?
See page 23,
2011 Fuel Economy Guide (PDF) (EPA)
BUICK Lucerne FFV A-4 3.9/6
17/27 $2,113 Gas 390
13/20 $2,441 E85 280
CHEVROLET
Impala FFV A-4 3.9/6
17/27 $2,113 Gas 370
13/20 $2,441 E85 270
FORD Crown Victoria FFV A-4 4.6/8
16/24 $2,335 Gas 360
12/17 $2,613 E85 270
Ethanol = Crappy Mileage
“Why can’t we buy our ethanol and sugar on the international market? — we could but it would be stupid. One of the primary reasons for fuel ethanol is to provide a local fuel alternative so we are not strategically tied to some foreign supplier for all our energy needs. Buying fuel ethanol from Brazil just trades one sole source supplier of energy for another — seriously stupid move for something as critical as transportation energy.”
LMAO! Yes of course you would hate to see Ethanol competition from more efficient sugar based blends. So you naturally support import tariffs as well to further punish the consumer with even higher gasoline prices. Energy Independent is a myth,
5 Myths About Breaking Our Foreign Oil Habit (The Washington Post)
“The current fuel ethanol industry can now be profitable without it if corn is priced at a fair value (above cost of production so the farmer can afford to grow it, and the oil industry did not try to strangle the fuel ethanol industry at every turn and turn them into a captive industry.”
Please explain to me how a “fair” value is determined then explain who determines what is a “fair” value. Oh and your nonsense about “cost of production” is meaningless. There is no fixed rate for a cost of production for any commodity. I could careless if inefficient farmers cannot produce corn at a competitive price, if they cannot they should go out of business. And enough with the oil industry conspiracy theories those are pathetic.
Poptech says:
All the Ethanol shills who support government welfare for corn farmers and are anti-consumer choice for their vehicle fuels come out of the wood-work with these threads.
Sorry – but Pimental & Patzek (and Searchinger) HAVE been thoroughly refuted – by a myriad of sources – again simply type “Pimental debunked” in Google … anyone who relies on Pimental and Patzek today for any valid basis is not worth much response to.
I’ve also found people that refer to others as “shills” fit that same mold.
As to Searchingers “report” the Dept of Energy had this to say “The Searchinger study is plagued by incorrect or unrealistic assumptions, and obsolete data.”
Just one of many studies debunking Searchinger – who by the way shares many of the same issues as James Hansen when you check into his background ….
Researchers Michael Wang, at the Argonne National Laboratory, and Zia Haq, at the Department of Energy, recently offered a detailed response to the Science magazine article authored by a team led by Timothy Searchinger.
Wang’s analysis shows a reduction in greenhouse gas emissions from corn ethanol, compared to the Science magazine results. In the response, the authors indicate that Searchinger’s team made errors in updating the 1999 GREET model developed at Argonne by a team led by Wang. According to Wang and Haq, Searchinger modeled a case where corn ethanol production reached 30 billion gallons, compared to the 15 billion cap envisioned in the Energy Security and Independence Act; did not increase corn yields; underestimated the protein content of distiller’s grains by 23 percent, incorrectly assumed a 62 percent in corn exports for 2007, omitted a 400 percent increase in distiller’s grain exports, assumed constant deforestation rates in the Amazon and other areas despite downward trends, and did not account for an increase in corn ethanol production efficiency. Wang and Haq warned policymakers that indirect land-use modeling was in its infancy and not to be misguided by accepting results as definitive at this stage of model evolution.
Michael Grunwald of Time Magazine recently published a new, rather self-serving article in the Washington Monthly, filled with distorted logic and mangled facts.
His portrayal of Tim Searchinger as a humble lawyer who experienced an epiphany about biofuels is disingenuous at best. While now a visiting scholar at Princeton University, Tim Searchinger was formerly a lobbyist for the Environmental Defense Action Fund and was intimately involved in lobbying key Members of Congress during the drafting of the Energy Independence and Security Act of 2007.
Manfred says:
The correlation is mostly incidental. With the increased use of corn for ethanol, the planted area increased massively as well.
Don’t forget as well the large increase in productivity – us corn crop yields continue to climb significantly
I’d really be interested to see full disclosure statements from hotrod (Larry L) and 220mph. Do either of you two individuals have any financial interests (directly or indirectly) in the ethanol industry? Just curious. Reiterating Smokey’s comments (thanks, BTW), what would happen if all ethanol subsidies ended tomorrow? If the taxpayer were not forced by a coercive government to fund this folly, would it survive on its own merits? You two speak glowingly of all the advantages of ethanol. If true, it shouldn’t be necessary for the taxpayer to subsidize it, now would it? Subsidies are simply a political transfer of wealth. Has domestic ethanol production resulted in any meaningful decrease in the % of foreign oil we import? Or is this like “jobs saved or created”. We would have had to import even more except for… Yeah…right.
Ethanol, which by the way, I am a big fan of in beverage form, is no different from wind or solar power. It simply cannot exist as a viable entity in a free market economy without taxpayer subsidy. By definition this means it is a non-viable technology. Converting food into fuel is exactly what biological systems do…except we do it far more efficiently.
This is not your ordinary link to a “scientific source”. This is actually a link to an article in Car & Driver magazine which appeared several years ago. I don’t read C&D. I found the link in the comments section on another site several months ago. It is actually a very good article. It’s actually worth the time to read as the author obviously took the time to research it. It can be found here:
http://www.caranddriver.com/features/06q3/ethanol_promises-tech_stuff
I was writing an article about energy independence for submission to another site (or possibly this one). The next morning I awoke and scanned the news blogosphere (as is my wont). I discovered the fine article by Dr. Smith I previously linked to and decided not to bother. He is far more qualified and stated his (and my) case far better than I could. I encourage all readers to take at look at his piece.
http://scienceandpublicpolicy.org/images/stories/papers/originals/toward_rational_energy_planning.pdf
Larry is completely correct in that the Mexican small white corn producers abandoned the fields and many of the young men left for the USA to find work. There was an excellent article published somewhere just a week or so ago. The Mexican govt has a program but it favors the larger producers yet the fields are too small for such and now with the young gone- the old cannot tend to the fields since machinery is not heavily utilized there. The first round of food riots there was misinterpreted by our press who 1) did not understand the differences in the corn types and 2) occurred at the end of the growing season when the the crop was in the bin and traders started the run-up fed by fear in the housing and stock markets- at that time it was thought grain and oil was the safe bet- a few months later corn fell to near $2 and oil $30. It is interesting to note that ethanol production continued to climb while corn was falling. what was one major reason besides the traders now running in a different direction- The big reason was falling demand for grains because meat consumption fell as much of the world decided to go back to eating grain. Distillers grains also started moving into all animal diets in a big way as a flood of excess hit the market.
Smokey:@Mike says: “Wheat prices have not been flat.”
It’s the substitution effect. When one commodity becomes expensive, people purchase another commodity with essentially the same utility. This drives up the price of the substitute.
_________________________
AW said: “As shown above, food prices surged to record levels in February despite February wheat and rice prices being essentially flat. Yet, February corn prices are up …”
I was only responding this statement. Rice prices have been steady:
http://www.indexmundi.com/commodities/?commodity=rice&months=60
Why would the substitution effect only apply to wheat and not rice?
I don’t disagree that our ethanol policies make no sense and are one of many factors pushing up world food prices. The failure of the Russian wheat harvest is another. That was certainly weather and perhaps climate change related.
hotrod ( Larry L ) says:
March 5, 2011 at 5:55 pm
Not true, fuel mileage does not directly track with fuel energy content. It tracks with engine efficiency at extracting that energy. Ethanol added fuels do not reduce fuel mileage in all cars, some makes and models of cars actually get better fuel mileage on high ethanol blends than they do on straight gasoline.
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
Maybe, but that isn’t what the US Department of Agriculture and USDOT found in their studies. In their study they said engines optimized for Ethanol “might” outperform diesel and gasoline, but they didn’t at the time the studies were done – around 2002 to 2005 I believe
I don’t have the references handy but some can be found at Emissions of Diesel Engines Running on Different Biofuels and their
Health Related Aspects
G.A.M. Janssen, FACT Foundation. Horsten 1, 5612 AX, Eindhoven, The
Netherlands.
(info@fact-foundation.com)
From Yahoo Answers (and many other places) :
An internal combustion engine that runs gasoline has a theoretical maximum efficiency of around 30%. 1 This is primarily due to compression ratios and the heat at which the combustion occurs.2 The designed compression ratio is determined by the octane rating of the expected fuel. 3 Ethanol like diesel can be compressed to a higher level than gasoline.
A diesel engine has a theoretical efficiency of around 40% due to its compression ratios. But you can see on this chart: http://en.wikipedia.org/wiki/Gasoline_ga… that while diesel has about 129,500 BTU and more than gasoline’s 114,000BTU ethanol (E100) has only 76,100 BTU. So although the engine may be 25% more efficient the fuel contains about 33% less energy.
Poptech- I have a small fleet of FFV’s (mostly 3.5L Impalas) and I can assure you that they run on E85 90% of the time. The EPA mileage rating for E85 is a calculated range based on BTU content- not in real driving conditions. My fleet averages 80% of the range they would get on gas but the E85 is still lowest cost per mile most of the time. Maintenance also seems to be less. The govt ratings ignore that since E85 generates less heat- less gets wasted out the radiator for cooling (thus the lower loss of mpg than predicted per btu). It can be better than that- I would like to populate my fllet with the new Buick 2L turbo FFV which appears to be single digit % loss in mpg.
Miles per btu important- more so than energy density per gallon- otherwise we would all be running on diesel fuel or better yet- bunker oil.
Wow. A jump to conclusion, and an unecessary and misguided immediate call to action leads to yet another unintended consequence by a group of narcissistic communistic social engineering bunch of ..**&&&&*ssssssssss << yep. I censored myself.
Well, at least that whole jumping to conclusions thing was limited to ethanol subsidies…..OH WAIT!!! NO!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
You are correct the boaters got screwed because the manufactures were brain dead and used resins that were well known to be incompatible with ethanol added fuel years after ethanol was required by law to be added to gasoline in large parts of the country. Here in Colorado oxygenated fuel was required by law in 1988, any manufacturer of a device that used gasoline for sale in the United States should have dealt with this issue 20 years ago. The fact they did not is due to either incompetence or willingness to sell defective equipment to their customers.
There are no other cost effective oxygenates for adding to gasoline besides ethanol. Methanol (been there done that — major corrosion issues)
MTBE — major water table contamination issues.
Ethanol — high blending octane (118 octane when blended with gasoline up to about 60% — less effective at higher blends) Of course the octane test itself is not appropriate for high alcohol fuels, so talking about fuel octane with ethanol added gets complicated.
Its “road octane” in 85% blend is somewhere between 112 and 118 octane based on real world usage. Ethanol is much less corrosive than methanol and is easily passivated with corrosion inhibitors as are required in U.S. E85. It is biologically natural and benign easily decomposing if spilled. There is no other readily available chemical that can do what it does for the cost.
Larry
Curiousgeorge says, “To proclaim that we are taking food out of the mouths of people by producing corn for ethanol is simplistic at best.”
Simplistic? No. The simple truth? Yes. Farmers plant the kind of corn that will sell and make them a profit. If there were no profit in corn grown for ethanol, the farmers would be planting corn that would feed either people directly or indirectly (as is feed corn). The insane and immoral government policy of forcing gasoline to include ethanol does in fact directly and necessarily take food out of the mouths of hungry people. So, Curiousgeorge, you a dead wrong.
So I see my question was ill-posed, I gave a choice of plain gasoline and gasoline with ethanol as an oxygenator. Considering that oxygenation has some value for the environment I would propose a new question for Larry or any other ethanol proponent. It looks like the choices are methanol, ethanol, (or propanol or butanol with less oxygen). Water has the most oxygen but doesn’t burn. Methanol has the second most oxygen, so wouldn’t that give it an advantage over ethanol?
I don’t believe the scary stories about MTBE. First, if it got in the groundwater, the other fuel components were not far behind. Second, the toxicity of all solvents is probably similar.
Finally, the nutritional value of corn is negative in many cases due to poor digestion. Perhaps once the starches are turned into sugar and removed, there is a semi-edible waste product like tofu from soy oil processing. I am certain I would rather eat a cow that was fed grass than one that fed some leftover glop from corn processing.
hotrod ( Larry L ), “Every dollar spent on fuel ethanol that a local fuel ethanol plant gets for the fuel goes back out as wages to staff, purchases from the local community, and payment to local farmers. They each in turn spend that money in some other local business, or invest it.
As much as you folks want to paint certain companies as some evil corporation, because they make money through fuel ethanol, remember that the vast majority of that money is paid back out as wages and purchases of local supplies and support activities from painters to construction workers, welders to truck mechanics to office workers — etc.
All that money stays in our economy and gives other people jobs they would not have if the fuel ethanol industry did not exist.”
Welfare “money” stays in the economy too, except it robs capital from the private sector just like the Ethanol industry does. The Ethanol industry are not evil they are just welfare recipients and an inefficient allocation of capital. Capital should be free to go where it is best needed in a global economy without market distortions for inefficient production of Ethanol due to government subsidies and mandates. If Ethanol was competitive it would get capital investment on it’s own. Buying foreign oil is more economically viable for our economy and makes our businesses more efficient. There is nothing wrong with using the most economically viable source of energy available regardless of where it comes from.