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Food and Fuel
American Coalition for Ethanol: The Real Cost of Food has Very Little to do with Ethanol, August 2011
Before believing that ethanol's use of corn is causing the run-up in food prices, consider these facts:
- On-farm costs only account for 11.6 cents of your dollar
- Ethanol consumes only 3% of the total world grain supply
- Corn accounts for only a few cents in the cost of common food products
American Coalition for Ethanol: Ethanol Production is Expanding, but so is the Total Supply of Corn, August 2011
Larger U.S. corn crops mean a larger "pie" for everyone to have a slice.
- Thanks to new technologies, U.S. corn yields are consistently increasing
- The overall size of the U.S. corn crop is increasing, creating a larger overall "pie"
- U.S. corn exports have stayed consistent during the period of ethanol expansion
- One-third of the corn that enters an ethanol plant is returned to the feed market as distillers grain
American Coalition for Ethanol: The Real Reasons Food Prices are Increasing, and Don't Think "Food vs. Fuel" August 2011
There are many factors on the world stage that are behind the increase in food prices.
- Oil prices have gone up 246% over the past 2 years
- Speculation in the commodities markets is driving prices to artificial highs
- Research by The World Band found that biofuels were NOT a major contributor to the food price increase in 2007-08
Farm Foundation: What's Driving Food Prices in 2011? July, 2011
While ethanol was unfairly blamed - some of the same factors that drove up food prices in 2008 are still at work today, while new and very different factors have also emerged. New factors shaping today’s food prices include:
- Persistent demand shocks for corn, and the huge quantities of soybeans imported by China
- Market inelasticity and the reduction in responsiveness of prices to demand and supply forces
- Weather and grain stocks
- Macroeconomics: a weaker U.S. dollar exchange rate
Renewable Fuels Association: New Analysis Disproves Food v. Fuel Argument, July, 2011
Ethanol production is not driving up food prices, according to a study by Informa Economics. There is no statistical evidence to support the argument that ethanol production is driving consumer food prices higher.
- There has historically been very little relationship between annual changes in corn prices and consumer food prices.
- The rising cost of other components in the supply chain such as labor, packaging, transportation, advertising, rent, and taxes are the main causes of rising food prices.
- There has been a historically weak correlation between corn prices and livestock, poultry, egg, and milk prices.
Argonne National Industry: Five Ethanol Myths, Busted, June 2011
The United States Consumes nearly one-quarter of the world's petroleum production, yet contains a small fraction of its reserves. As other countries' economies grow, the appetite for this finite energy source increases. This places greater pressure on the resource itself and the environment at large. With inflation and higher energy costs consuming an ever-larger portion of our budget, the need for additional energy sources grows. There are many myths surrounding ethanol and here are counterpoints to five prevalent myths.
Renewable Fuels Association: Fueling a Nation, Feeding the World, May 2011
As the U.S. ethanol industry has expanded, so has the production of high-quality animal feed as a co-product of processing corn starch into ethanol. If compared as a “separate country,” U.S. ethanol refineries produce the world’s fourth-largest high-protein “corn crop.”
Food vs. Fuel, March, 2011
Escalating gas prices are hitting consumers’ pocketbooks hard. However, relief can be found by using ethanol-blended fuels which lower gas prices. It has been proven that corn ethanol has an infinitesimal affect on food prices and slashes the price consumers pay at the pump.
Iowa State University: Ethanol Policy Impact on Corn Prices, May, 2011
The Center for Agricultural and Rural Development (CARD) at Iowa State University issued a policy brief on the impact of ethanol and the ethanol blender’s tax credit (Volumetric Ethanol Excise Tax Credit – VEETC) on corn prices. The tax credit provides blenders and marketers with a 45-cent per gallon credit for every gallon they blend with gasoline. CARD’s analysis covered corn marketing years 2005-2009, in comparison to 2004.
World Bank: Impact of Biofuels, food prices, July 2010
A report from the Development Prospects Group at the World Bank concludes that, “the effect of Biofuels on food prices has not been as large as originally thought, but that the use of commodities by financial investors may have been partly responsible for the 2007 - 2008 spike.” Instead, they concluded that rising energy prices played a significant role in the increased prices of food.
Fuel Prices
Iowa State University: Ethanol Dramatically Lowers Fuel Prices, May, 2011
The impact of ethanol production on U.S. and Regional Gasoline Markets for the period 2000 – 2010 was evaluated by the Center for Agricultural and Rural Development (CARD) at Iowa State University. The study found that blending ethanol with gasoline had a dramatic Effect on lowering fuel prices, with the Midwest region receiving the most benefit.
Energy Security
Ethanol and National Security, November 2011
E & E News: Agencies Eye Defense Law to Speed Capital to Industry, July 2011
The Obama administration is considering declaring domestic biofuel production a critical defense capability. The Navy and the departments of Energy and Agriculture are currently designing a new program that would provide as much as $500 million to the biofuel industry in an attempt to bring production facilities to commercial scale. Long time director of the CIA, James Woosley said that it is a bad thing for transport to depend on oil when the great majority of that oil lies in volatile parts of the world whose governments are hostile to the West. He argued that by making the Middle East so wealthy, we're indirectly subsidizing terror. "We're paying for both sides in this war, and that's not a good long-term strategy," he says.
Food vs. Fuel vs. Freedom, March 2011
Much has been written about the food vs. fuel debate. But what about the fuel vs. Freedom debate? The use of more domestically-produced ethanol will provide Americans More Freedom from Foreign Oil produced in countries with unstable governments, dictatorial ruling parties and political unrest. Now is the time to support American jobs and chose American renewable energy over foreign oil.
Environment
Biomass and Bioenergy Journal: New Study Finds U.S. Ethanol Production Growth Has Not Triggered Indirect Land Use Change, July 2011
A recent study on indirect land use change (ILUC) due to biofuels production indicates that the real impact of U.S. biofuels production on ILUC domestically and internationally is nonexistent. This is the first study to use evidence based evaluation of ILUC utilizing actual historic data, employing a ‘bottom-up’, data-driven, statistical approach based on individual world regions’ land use patterns and commodity grain imports.
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