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Monday, February 21, 2011

Yale Center: Ethanol Mandate Raising Global Food Prices

From the YaleGlobal Online Magazine: a short piece on global food price factors.  Quote (emphasis mine):

Third, the US ethanol subsidy diverted more than 100 million metric tons of corn into ethanol last year. This did little to reduce global warming, and made basic grains and meat more expensive for most people in the world. Nearly a third of US corn is now used for fuel. If the Senate lowered the US deficit by reducing the tax break on ethanol, corn prices would drop and China's increased consumption would easily be accommodated. Since there was a recent decision to increase the amount of ethanol in gasoline, this problem will likely intensify. A move to cellulose-based ethanol would be helpful. Land released from corn could be used for soybeans and reduce prices for several crops.

I did not realize that 1/3 of our corn production is going into ethanol.  And that is at an average mix of only about 10% (since E85 is not widely available and consumed)


Shelba Trumble said...

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Heather Hadden said...

Simply, if the food value of grain is less than its fuel value, the market will move the grain into the energy economy. Thus as the price of oil rises, the price of grain follows it upward. The county is going to be diverting corn into ethanol as long as it is profitable to do so.

Anonymous said...

Not true Heather. Gov't subsidies change the laws of economics. It takes roughly 2 gal of diesel fuel to grow the corn for 1 gal of ethanol. Your tax dollars are being used to starve the world.