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Cornprices

US export corn prices by year

A major concern regarding ethanol is the rising cost of food; something that appears to be exacerbated by the increasing use of biofuels, even at its current low levels. As of 2009, approximately one quarter of all corn is used to produce ethanol, and this fraction has had significant effects on the price of corn and its derivatives. For example, between April 2007 to 2008, food prices rose 5.1 percent. Along with rising prices of energy and other factors, the use of corn in ethanol production is approximated to have contributed 0.5 to 0.8 of those percent points, with the price of corn alone rising 50 percent in that same time frame. At the same time, soybeans also saw a significant rise in price, around 30 percent due to farmers replacing soybeans with the now more valuable corn in their fields, all resulting in a smaller supply.[1]

Yet, while an increase in food prices of 0.5 to 0.8 percent may seem insignificant, it is important to remember the small scale of ethanol use at this time. Only 9 billion gallons of ethanol were used in 2009, with 2.25 billion of those gallons being corn ethanol. In 2007, however, the United States consumed 142 billion gallons of gasoline.[2] The amount of corn ethanol created was less than two percent of the total gasoline consumption in the US, and the price of corn still doubled, with food prices in general rising between 0.5 and 0.8 percent due to this small amount. In addition, government programs related to supplying food expected to see directly increased costs from this effect, ranging from $600 to $900 million in fiscal year 2009.

Solutions Edit

However, it should be noted that the forces that drive corn ethanol also act in the opposite direction. As costs of corn increase, farming it becomes more lucrative, resulting in further land to be used in corn production, thus increasing supply and decreasing cost. However, this process could be completely avoided by using another source, such as switchgrass or sugarcane. While these crops may be less understood than corn, they also depend less on food prices and vice versa, allowing them to be separated and prevent the rising food costs.

Corn use

2011 corn usage

Government regulation already suggests this very transition, as the U.S. Energy Independence and Security Act of 2007 sets a goal of 36 billion gallons of biofuel per year by 2022, with a limit of 15 billion gallons to be provided by corn. It also supports cellulosic ethanol, as the remaining balance after corn ethanol must include 16 billion gallons per year of the alternative, which also maintains significant production benefits to corn. Increased ethanol use has an indirect correlation to rising food prices through its proxy of corn, and care must be taken that biofuel production within the United States is phased away from the use of corn to prevent the rise in prices. It is clear that corn is not the answer to fuel scarcity or biofuel production.[3]

Conclusion Edit

While these rising prices may prove unsustainable when considering corn ethanol, as the United States’ plan to increase production of advanced biofuels like cellulosic biofuels continues to develop, there will be inherently less reliance on corn as a main provider in the field. With further technological advancement in those fields, corn will cease to bear the main burden in production, and corn and food prices can be expected to begin to settle and decrease from their currently inflated values. Because of this fact, it isn’t apparent that the rising costs of food are prohibitive when considering biofuels as an alternative to gasoline.

References Edit

  1. (2009).The impact of ethanol use on food prices and greenhouse-gas emissions. Retrieved from http://www.cbo.gov/sites/default/files/cbofiles/ftpdocs/100xx/doc10057/04-08-ethanol.pdf
  2. Energy Information Administration. (2012, Feb 3). Eia. Retrieved from http://www.eia.gov/tools/faqs/faq.cfm?id=23&t=10
  3. Motavalli, J. (2012, 03 1). Flex-fuel amendment makes for strange bedfellows. . Retrieved from http://wheels.blogs.nytimes.com/2012/03/01/flex-fuel-amendment-makes-for-strange-bedfellows/?ref=automobiles

Picture ReferencesEdit

Cornprices
http://www.bls.gov/opub/ted/2012/images/ted_20121128_home.png



Corn use
http://ethanolrfa.3cdn.net/d4ad995ffb7ae8fbfe_1vm62ypzd.pdf

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