Sustainable Energy Transitioner

The emerging global food crisis has brought crop production back into our consciousness. I myself have started to follow the record prices of corn, soybeans, rice and other foods sold worldwide in the commodities market. The trends of the last several months brings Malthusian chills to observers of the price hikes among physical commodities that have constraints on supply while rising populations and incomes increase demand. The movie “King Corn” released early this year was made in 2005/2006 and thus describes the corn market before the ethanol boom had its significant impact on price. This historical perspective shows how such dramatic global consequences of food cost inflation went unanticipated by so many for so long.

For the past three decades, corn farmers have generally been producing more than consumers demand. Many farmers were operating at a loss and required government support to make ends meet. Huge surpluses filled the silos across Iowa and the Great Plains. Corn was so abundant that it fed both humans and livestock – and it even became the primary sweetener for sodas and candies above beet and cane sugar. The production of ethanol to substitute oil became a win-win proposition by providing a market for some of the unused corn while also reducing foreign demand for oil. But it appears the federal planners who established a mandate in 2005 of 7.5 billion gallons produced by 2012 and last year’s expansion to 15 billion gallons by 2022 forgot their calculators to extrapolate the effects of such increases in ethanol production. While some ethanol production can help farmers maintain profitable bushel prices for their corn and provide a regional fuel, the size of unfolding mandates appear poised to wreak havoc on our global food system.

In 2008, over 30% of the harvest is expected to go to ethanol production. Further increases in ethanol production (to replace up to 10% of US gasoline demand) would send corn prices to even higher than the $6 per bushel all-time record reached earlier this year. With corn in almost everything that we eat, as the documentary demonstrates, such a price trajectory would pressure inflation throughout our food supply. The more corn we produce for ethanol, the less land we have to cultivate soybeans and other crops – which puts pressure on people around the Amazon and other tropical rainforests to destroy the native wildlife and replace it with monoculture farmland.

I recommend relaxing the mandate going forward and saving federal dollars by reducing the 51-cent per gallon subsidy for corn-based ethanol. Such policy could help to get global food systems back in balance and could even help to preserve biodiversity and the climate saving nature of our world’s tropical rainforests.