Thoughts from the Middle of Nowhere

Ethanol Production Threatening Livestock Industry, Food Supply

Think tanks and livestock producers alike are alarmed at the rate of growth of the ethanol industry and its effect on feed supplies for the meat industry.

Ron Plain, an agricultural economist at the University of Missouri, says that increases in corn costs have already added 25 percent to the cost of raising hogs to slaughter weight, from a projected $40 per hundredweight in early 2006 to an actual cost of about $50 per hundredweight. If corn continues to the $4.05 per bushel price level considered the break-even in ethanol production, the increased feed costs will add 31 percent to the cost of hog production.

Gene Gourley, an Iowa pork producer and swine nutritionist, testified on behalf of the National Pork Producers Council to the Senate Agriculture Committee Wednesday that ethanol producers are receiving huge subsidies of $1.53 per bushel of corn purchased and tax credits of $0.51 per gallon of ethanol produced, resulting in runaway growth in ethanol production. “These incentives have the ethanol industry growing at an almost unbelievable pace,“ he said in his testimony. “New plants are springing up everywhere, and they’re using a lot of corn.“

In a way I keep laughing about these stories. I have been expressing my concern about the energy industry consuming our food supply for quite a while now and it seems like just now other people are starting to catch on.

I did find this comaprison from Lester R. Brown interesting to say the least.

One 25-gallon tank of ethanol, he says, consumes an amount of corn that would directly or indirectly feed a person for a year.

So it really seems my concerns about food security and ethanol are very real. I am not just blowing smoke, this ethanol boom is putting our food supply in jeporady and hunger is a real issue to be concerned about. In a way this is all self correcting though. All the ethanol plants either in production now or being built, will drive the price of corn high enough so that the plants will start losing money and then a bunch of them will go bust. With oil prices drifting down and the cost of corn drifting up, this break even point will be reached sooner than we all think.

Would higher food prices cause a consumer backlash against ethanol? I'm not real sure. I don't know that the majority of people would understand all the relationships and understand that ethanol is the reason food prices are rising. Would the consumers also then understand that the government subsidies of the ethanol industry are part of the reason for the higher food prices? Would this then cause a backlash against the government?

Thinking about government subsides to the ethanol industry, what is the government going to do when ethanol plants do start driving the price of corn so high the plants start losing money? Since the Government is so hot and bothered for ethanol will they then start subsidizing the purchase of corn for the plants so the plants can stay in operation driving the price of food for consumers even higher?

Really, the only solution to this problem is Cellulosic ethanol. This process uses waste materials instead of food materials to make the ethanol. Then all the questions about using our food for energy would be abated. The problem is that Cellulosic ethanol has not been perfected yet. To save our food supply maybe we need to invest more money into R&D on Cellulosic ethanol. I think that would solve this particular problem.

A Chicken McNugget is corn upon corn upon corn, beginning with corn-fed chicken all the way through the obscure food additives and the corn starch that holds it together. Michael Pollan

Soaring corn prices are squeezing meat and milk producers, but consumers will not necessarily see higher prices at the grocery checkout, Agriculture Secretary Mike Johanns said in an interview Thursday.

Costly corn has made it more expensive to feed cows, chickens and pigs. Demand for ethanol, a fuel made from corn, has pushed the price of corn above $3 a bushel, the highest level in more than a decade.

That is bound to have an impact on farms and ranches, Johanns said.

"My best projection is that for a couple of years here, you are going to have a tug-and-pull between various industries," Johanns told The Associated Press.

Because so many factors go into making food, consumers probably will not see a direct impact, he said.

I think Mike Johanns is talking out his ass here. The Agriculture industry is supposed to suck it up and and lose more money than they do to allow consumer prices to stay the same? That's insane!

It doesn't take a rocket scientist to know that cost in the Agriculture industry go up, food prices are going to go up and with corn prices sky high, food prices are going to go up. That's the decision our leaders in Washington and the buying public have made. They want cheaper gas prices and are willing to pay more for food to get it. Obviously driving their vehicles around is more important than cheap food so why should Johanns try to insinuate otherwise?

Hell, the talk is that the new Farm Bill will push even further into energy production which will drive the price of food even higher. I haven't heard many people talk about this but it's going to happen. The consumers out there who think food comes from a grocery store and not real live people working in the country, don't understand that the drive to grow our own energy will take land out of food production causing higher food prices. It's basic economics. Shouldn't Johanns be out there educating the public of the repercussions of the decisions being made for and by them?

No, he just wants to hide the facts from the public to drive policy, just like they tried to hide the facts on NAIS until enough people made enough noise. I just want everybody out there to understand the consequences of their drive to grow more energy means higher food prices. This is simple supply and demand. Suck it up and deal with it. Don't try to hide the facts. That just causes problems in the long run.

The supply of government exceeds demand. Lewis H. Lapham

Scientists urge research to aid in balancing food, energy needs

To ensure that there's enough corn to fuel humans as well as vehicles, scientists are urging more research into boosting corn yields and improving ethanol production.

Many key issues related to expanding the nation's ethanol industry aren't being studied under current government programs, said Kenneth G. Cassman, director of the Nebraska Center for Energy Sciences at the University of Nebraska-Lincoln.

"It's the core issue to ensuring that we don't come up short in food supply, and don't have high consumer prices, and can still maintain expansion of the ethanol industry," he said.

This is an issue I am really concerned about. With the thoughts of growing our own energy via ethanol and biodiesel, what's going to happen to food production? Right now that thought is taking second place in most people's minds as they run around making energy of our food supply.

In a way, the cattle industry is on the fore front of this concern, which explains my concern, since such a large part of our production hinges on corn feed in the feedlots of the midwest. Price of corn goes up, cost of feeding cattle goes up, and the feeder needs more money to break even which causes the prices in the meat case for consumers to go up. This puts food further out of reach of poor people and causes more hunger. This is a concern for me. They claim the by product, distillers grain, of ethanol makes good cattle feed and will take up some of the slack for the loss of corn to ethanol. Fine, I buy this argument, but what's it going to do to the cattle industry as a whole in the long run with so much corn going to ethanol instead of feeding?

I've read quite a few articles on just this subject through out the summer and they all say the same thing, don't worry. The cattle feeding industry will be just fine with the addition of the distillers grains to feed formulas, don't raise a ruckus. I kind of question this, it seems like ostriches sticking their heads in the ground and not wanting to look the situation over. Talking to my banker, cattle buyer, and other professionals, they're like me, they have absolutely no idea how the cattle industry is going to be affected by the ethanol boom and they are concerned. So, in the long run for the cattle industry we get to sit and watch the roller coaster ride of ethanol and see were we are going to end up when it's done. How it will affect food prices for the consumer has yet to be seen.

A bigger picture shot than just corn and the cattle industry also includes considering how crops will be affected by ethanol and biodiesel. The more cropland that is taken out of production for food and put into production for energy is going to affect the prices that consumers pay for food at the store. In the long run, the money the United States might save consumers with the growing our own energy campaign, might be offset by the extra costs the same consumers to feed their families because of the higher prices for food. The only advantage would be the money is staying in the US instead of going over seas.

Looking at my whole rant here, you might think I am against growing our own energy. I'm not, just concerned how this technology is going to affect feeding the consumer.

My Darling Wife one time went on a spiel about how we, her and I, were unimportant in the world and that we didn't make a difference. I looked at her and told her that we make a big difference in the world. A human being has three basic needs to survive in this world, food, water, and shelter. Everything else done in this world for humans is an add on product that is important, but maybe not vital, to human existence. We provide one of the basic things that humans need, food. I am very proud that I raise food to feed people. It is a very important and necessary so to say we don't matter is false. We provide a vital service to humanity and should be proud.

When I say I am concerned about the price of food for the consumers, this is where I am coming from. Feeding people is important to me and to have some of the food supply siphoned off for another reason concerns me. As long as we have enough food to feed people at a reasonable cost then I have no problems with the diversions. We are stepping off into unknown territory here diverting our food supply to energy. We need to watch were we go so that it doesn't go to far and cause people to starve. I think it's a valid concern.

Corn is the leading food and feed crop of the United States in geographic range of production, acreage, and quantity of product. The vital importance of a large acreage of this crop, properly cared for, therefore, is obvious. David F. Houston