But the processes used to make ethanol have become more efficient. Watch this video from CNN posted on YouTube in May 2008, and you’ll see that many of the same elements in this video being replayed today. High corn prices, an acreage battle with other crops, and so on.
Ken McCauley hits on many great points in that video which are still true today, some of which aren’t often brought to light in the food vs fuel debate. What’s changed now is that ethanol refining is becoming more efficient, reducing it’s cost and energy required to produce it. Look at Poet’s newest plant opening in Indiana boasting it’s use of enzymes in the production process rather than heat, and it’s new water recovery system to reduce usage and discharge. Only time will tell, but I personally believe we are going to move away from grain ethanol and cellulosic will take over at some point.
Now let’s look into a different video from ABC’s 20/20 showing the other side of the debate.
The two things that stand out to me are that corn is being attacked for being subsidized (an issue I plan to get into in the future), and that “much more land must be plowed” as Mr. Stossel points out. This argument hasn’t changed since this was recorded going into the 2008 election. I think whenever you bring up ethanol tax credits, etc. you have to realize that the oil industry isn’t exactly immune to them, it just so happens you don’t hear that part from the biofuel critics. All one needs to do is an internet search of “US oil subsidy” and you’ll find there are plenty. The second item on my Google search as I write this is a New York Times article stating that oil is one of the most subsidized businesses out there, so why does that seem to be left out of the argument? When John Stossel says “much more land must be plowed” is he referring to the acreage battle in which the most profitable crops compete for the limited amount of acres available, or is he implying to the many consumers living in urban areas that we farmers are just going to cut down some forests and parks in the name of King Corn? Where is there more land? The only place I see it coming from is taking it out of conservation reserve programs which reports show to be roughly 10 million acres nation wide, and if we’re talking about 90-92 million acres of just one crop, corn, for 2011 that’s not a lot when you look at the big picture. I know on our farm we aren’t planning on putting any of our filter strips back into production as they are on marginal ground anyway.
So as time goes on the refinement process will continue to improve making biofuels easier to produce, and history tells us yields will go up as well allowing this country to continue growing food, fuel, and fiber, and oh yeah, have enough left over to export it too. We can and will continue to do all those things going forward, and for those who don’t think so I happen to agree with Secretary of Agriculture Vilsack’s statement from this year’s Commodity Classic when he said, “You should never ever bet against the American farmer because if you do, it’s a losing bet.”
So you’re telling me that Big Oil gets government money? What about oil needs to be subsidized? Those guys are raking in money hand over fist! I understand ehtanol getting subsidized, it’s practically a start-up. It is hard to compete against “Big Oil” and change the hearts, minds, and habits of millions of Americans who have become dependant on the crude.
When you mention ethanol tax credits, are you referring to farmers getting tax credits for selling their harvest to ethanol refineries?
Also, I would like to say that my opinion on the global food shortage has nothing to do with the amount of corn being alocated to ethanol. I beleive it is more about delivery. For countries with massive amounts of poverty it’s not that their isn’t food, it’s that the food isn’t getting to the people who need it.
In response to Stossel’s statement of plowing more land, spraying more fertilizer, and using more water….Isn’t most of that acreage being used for other crops already? I mean, yes, there are fields that are not planted that may be planted if the demand for corn (or beans, or wheat, or bananas) goes up. But it seems like that is an insignificant amount of acreage compared to the benefits.
There are so many points and counterpoints to hit on regarding this issue, that’s is hard to touch them all on a comment.
The Volumetric Ethanol Excise Tax Credit gives the blender $.45 for every gallon of ethanol. That translates to 4.5 cents for an E10 blend and so on. This goes to the blender, not the farmer. There is also a tariff in place that prevents the importation of foreign ethanol to this counrty. The fact the oil companies get subsidies too never really comes up in the anti-biofuel stance. I equate this to those who are totally oppposed to GMO crops. Well, I’ll quit using that technology tomorrow, but don’t let those same people complain when I start spraying more weed killer and pesticide to maintain our food supply because they don’t want us doing that either. Funny how that works, isn’t it?
A lot of people would lead you to believe the world is starving and it’s America’s fault for turning food into fuel. 3% of harvested grain is made into fuel, and much of that finds it’s way back into the food market in a manufacturing by-product known as distillers grains which are fed to livestock. If we are wasting so much grain by producing fuel with it, then why are still able to export corn around the world every year? The problem causing much of the hunger in the world in places like Africa, the Middle East, and many areas of Asia has more to do with what you said. The infrastructure for transport is minimal and many of the governments are in power for the sake of being in power, not to take care of their people. Many of these nations are stilling getting by on subsistence farming because the economic situations that exist prevent the widespread use of better technology that would allow them to be more productive agriculturally.
Finally, we are using less inputs (fertlizer, herbicide, pesticide, and fuel) to grow more crops every year. Just like any other industry, technology is leading the way for us to do more with less.
Oil is still king.Rush Limbaugh need I have to remind you again did a piece in his newsletter on 2008 how this is a fact.Many ethanol plants have been closed down.When the the fact that(quite frankly I have gotten sick and tired of people saying big this,big that or big whatever)the oil companies may get some tax dollars it should be pointed out that big abortion gets funded by the hundreds of millions of dollars to.Planned Parenthood is a bigger threat to America then Texaco,Exxon or Speedway ever will be.I would take anything the NY Times says with a grain of salt.What the heck does that liberal rag know about agriculture to begin with?It should be noted that it was Tom Vilsacks D oF Ag who proprosed rules barring teenagers and the like from working on farms only to retreat because people raised the devil about .Wonderful point when you say that the govts are in power to be in power and not to take care of their own people.Wonderful point.I still say lets open up ANWR,build the Keystone pipeline,build refineries in closed military bases and start drilling off shore.We have enough oil that we can t get to because Washington DC is standing in the way and still we suffer when we do not have to.Lets 135 gallon fuel tank times $4 is $540.Don t envy you there.Double that is over a grand.Just think we should concentrate on getting more oil out the ground because it where the past and future lies
Good pint by Jerry of the Cato Institute.Evan Bayh is so ignorant to the point that he does not realize that we have no other alternative.I agree that that we are somewhat depending others for oil.My answer is to start drilling for oil in the 50 states here since we have it already.Something else we have is a just great and tremendous resource to the north called Canada where we have buy the oil tar sands that are produced in the Fort McMurray,Alberta area.To quote Sarah Palin DRILL BABY DRILL!Right on the mark Cato!
I’m always amazed at how people call for using up USA oil first, and becoming dependent on foreign sources later, when we have no reserves and prices are much higher. It shows how much of conservative ideology in mainstream media is just corporate self interest. I’m also amazed at how weak NCGA is in support of fair prices for corn farmers (in the farm bill). That too is a corporate ideology, where farmers are led to support the buyers self interest instead of their own. This blog, like NCGA, misses the strongest (current) arguments against the food vs. fuel argument, which Stossel and the others also totally miss. Most of the hungry are farmers. They have no shortage (as you acknowledge,) but rather have poverty, from decades of low corn prices. It’s called export dumping, where the US loses money on corn exports, for example. It takes massive spin and ideology to get corn farmers to support their own cheap prices, siding with Cargill, ADM, Tyson, Smithfield, Kelloggs! Instead of bragging about low corn prices, NCGA should be pointing out that the farm share of the food dollar is too small and falling. One projection has the farm share falling to zero by 2020. Missing in NationalCGA’s argument is that ethanol helped end corn dumping, as global farmers achieved fair trade corn prices. Consumers were subsidized by corn farmers, according to USDA figures for about 25 years in a row, 1981-2006, but NCGA remains silent about that. In contrast, the American Corn Growers Association has always favored fair trade prices for corn, (in solidarity with farmers from other nations). My arguments are missing from the mainstream farm press, which is biased in favor of corn buyers and against corn sellers (farmers). Ethanol can survive only with skyrocketing oil prices. (Oil/barrel and corn/bushel are certainly not the same price, as they once were!) In the long run, demand for oil could jack up food prices so high that we’d all be in poverty and hunger, while only the rich could buy fuel, maybe. It depends on the whole balance in the economy. In any case, that is a horrible goal. That’s long term. Short term, (to repeat!,) ethanol has helped reduce and end export dumping, which is a great antidote to hunger, (but try telling that to the mainstream farm press and NCGA!).
I’m not personally very concerned with matters such as how much money I receive from a box of corn flakes. I’m concerned with the margin between the cost of producing a crop and the price I can sell that crop for later. This is actually the subject of a blog post I’ve been wanting to write for a long time, but haven’t gotten around to yet. Knowing the farmer’s share of a box of cereal is good perspective to understand that most of the cost of food often occurs beyond the farm. Grain prices have been high for a few years now, but they will fall at some point. I’ve been back to the farm full time for four years now and have sold corn from $3.12/bu to $9.00/bu and everywhere in between.
Few corn farmers are concerned or very much aware of how corn farming appears to food activists, (such as the cost of corn in a box of corn flakes). You, on the other hand, have an opportunity to communicate. I think it’s fair to say that few corn farmers know, for example, that food activists accuse them of lobbying for low corn prices (to be paid to them,) plus huge subsidies, $10,000 per year on up. Cheap corn for ethanol is seen as one of the key goals of corn farmers (where ethanol companies have built a huge complex with subsidies plus cheaply priced corn). This is reinforced when groups like NCGA fight the views of food activists by emphasizing the low prices paid to corn farmers. Corn farmers are then seen as part of a dominant lobby, getting their way (low corn prices, “King Corn”) in Washington.
Perhaps we could imagine just the opposite for corn buyers. Perhaps the big corn exporters, ethanol producers, high fructose producers, etc. are lobbying for high corn prices, so that they can pay high farmers high prices. The logic would be exactly the same. If any corn farmers reading this believe that, then please contact me. I’d love to sell you the Sutliff bridge. It’s really incredibly, a great investment.
What I find in real life, however, is that, for example, there are 2 categories of ethanol supporters. 1. the giant ethanol processors like ADM, who lobby Congress for low corn prices, and 2. a movement of farmer investors in ethanol, who have a goal of high corn prices, (but who have little clout in Washington). Perhaps you and others following this blog represent a third category. If so, I’d love to hear about it.
But not much moves the market like available supply. We’ve seen sustained high prices for three years because national average yield has been a bit below average. Markets are lower right now because everybody always gets all excited over planting intentions this time of year. And every year they go lower during harvest because the supply is very high. That’s why we store nearly on our grain at the farm in order to sell for a higher price.
Livestock producers are certainly not happy with what the price of corn has been as of late. RFS is still in place, but the credit for ethanol of $.45/gallon ended almost 18 months ago. And remember that was a blending credit, not a production credit. That means whoever blended a gallon of ethanol into gasoline got the $.45. And that entity was not necessarily and ethanol facility. It’s likely it may have been an oil company! I’m not against the oil companies I just think a lot of people didn’t understand that subsidy.
There’s a lot of communicating to be done because the type of activist you speak of takes the easy road of spreading bad information either intentionally or without knowing it because that info fits nicely into a certain narrative. It takes more brain power to do a little digging to find out what is really going on.
The kinds of food activists I’m speaking of are both better informed and deeper and more accurate in analysis than most farmers, and less. It’s a two way street. There really can’t be responses to most of my charges, as the issues simply aren’t known/understood by farmers. The same applies to the other side.
We do have much ,much oil under our land and on both coast.ANWR is a great example of this.WE are not out of any type of oil at all.Look at all the fracking going on in Western Pa,Eastern Ohio.Or all the drilling going on in THe Bakken area in The Dakotas where the unemployment is less then 3 percent.We most certainly do have oil reserves.And to think anything of the like is just pure ignorance.The problem is here is that Washington DC has placed alot of our public lands off limits to drilling for oil.For instance ANWR is just a 1000 acre in a matter of over a million acres in Alaska.We should be using our own oil in light that are we dependant on foreign sources somewhat right now.Another stupid thing to say here is the conservative idealogy in the mainstream media.Simply put THERE IS NONE!!!!!!!!!!!!!!!!!Tell that to Rush Limbaugh and he will laugh you back into the stone age.John Stosell is right on point
The question remains: Why would we want to use up our reserves first, (even as getting it using today’s technology increasingly damages our environment,) and become dependent on foreign sources later, when oil prices are even higher? Why do conservatives ignore that?
Not all of them do. 😉