DeafScribe (![[info]](http://l-stat.livejournal.com/img/userinfo.gif){kind=small} deafscribe) wrote,@ 2008-02-10 05:07:00 |
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Something's Gotta Give
You've probably noticed food prices have gotten steadily higher over the past few years. You might have attributed it to inflation, or rising energy costs that seep into the cost of everything else.
And those have been factors, but the real driver has been cruising beneath the surface. It has gotten some attention, but it's about to get a lot more. Our demands for food and energy are now in direct competition, and something's gotta give.
Consider:
We are now seeing the highest grain prices ever. EVER. Wheat futures are knocking around the $10/bushel level. Corn is running $5/bu. Soybeans are looking to hit $14/bu. come summer.
Now, unless you're a commodity trader, these are unfamiliar prices and measures. We don't encounter them daily the way we do with gas and grocery prices. To put this in some context, these numbers have doubled over the past year or two.
Ever heard of carry-over grain stocks? That's what's left from last year's harvest when the new harvest gets started. Grain markets keep track of this because those carry-over stocks can be valuable in years when the harvest is poor, which historically happens now and then due to weather.
This year, the world supply of carry-over grain would meet demand for 54 days. That's the lowest it's ever been. EVER. And it's poised to shrink even further. Why? Because the U.S. is diverting more farmland toward corn production for energy and less for food.
Most of the corn we grow now goes to feeding animals used in meat production, i.e., cows.
2008 will probably see over 25% of the entire U.S. corn crop going to ethanol production.
That proportion will grow as the value of corn for energy exceeds the value for food. The proportion of corn sold for food will rise in price. More land planted in corn means less land available to plant other grains, like wheat and soybeans. They also go up in price.
Some countries - Russia, Argentina, Thailand, Vietnam - instead of buying increasingly expensive grain from elsewhere, they're shutting off exports and keeping what they grow at home. Countries that can't grow their own, like Japan, will feel the pain of higher grain prices more than others. Countries that can't afford the higher prices - Afghanistan, Somalia, Sudan, Congo, Haiti - will feel more than pain. They'll be facing very real starvation.
So what's the solution? Get away from corn and move to cellulosic ethanol. Switchgrass and similar fast-growing grasses can thrive on marginal lands, offer a much better energy yield than corn, and generate far lower emissions in production and use than gasoline.
We don't have to jack up food prices, thin out our margin of carry-over stocks and starve people to create energy. Ethanol production from corn has got to go.
You want numbers? The Earth Policy Institute has got your numbers right here. And here.
You've probably noticed food prices have gotten steadily higher over the past few years. You might have attributed it to inflation, or rising energy costs that seep into the cost of everything else.
And those have been factors, but the real driver has been cruising beneath the surface. It has gotten some attention, but it's about to get a lot more. Our demands for food and energy are now in direct competition, and something's gotta give.
Consider:
We are now seeing the highest grain prices ever. EVER. Wheat futures are knocking around the $10/bushel level. Corn is running $5/bu. Soybeans are looking to hit $14/bu. come summer.
Now, unless you're a commodity trader, these are unfamiliar prices and measures. We don't encounter them daily the way we do with gas and grocery prices. To put this in some context, these numbers have doubled over the past year or two.
Ever heard of carry-over grain stocks? That's what's left from last year's harvest when the new harvest gets started. Grain markets keep track of this because those carry-over stocks can be valuable in years when the harvest is poor, which historically happens now and then due to weather.
This year, the world supply of carry-over grain would meet demand for 54 days. That's the lowest it's ever been. EVER. And it's poised to shrink even further. Why? Because the U.S. is diverting more farmland toward corn production for energy and less for food.
Most of the corn we grow now goes to feeding animals used in meat production, i.e., cows.
2008 will probably see over 25% of the entire U.S. corn crop going to ethanol production.
That proportion will grow as the value of corn for energy exceeds the value for food. The proportion of corn sold for food will rise in price. More land planted in corn means less land available to plant other grains, like wheat and soybeans. They also go up in price.
Some countries - Russia, Argentina, Thailand, Vietnam - instead of buying increasingly expensive grain from elsewhere, they're shutting off exports and keeping what they grow at home. Countries that can't grow their own, like Japan, will feel the pain of higher grain prices more than others. Countries that can't afford the higher prices - Afghanistan, Somalia, Sudan, Congo, Haiti - will feel more than pain. They'll be facing very real starvation.
So what's the solution? Get away from corn and move to cellulosic ethanol. Switchgrass and similar fast-growing grasses can thrive on marginal lands, offer a much better energy yield than corn, and generate far lower emissions in production and use than gasoline.
We don't have to jack up food prices, thin out our margin of carry-over stocks and starve people to create energy. Ethanol production from corn has got to go.
You want numbers? The Earth Policy Institute has got your numbers right here. And here.
