Even the JS agrees on ethanol?
Written by Brian on May 11, 2008 – 2:30 pm - Welcome, if you're new here, you may want to subscribe to our RSS feed or subscribe to our email newsletter. Thanks for visiting!
Okay, that may be a strong statement … the Associated Press probably wrote most of this story anyway:
In a new study, University of Wisconsin-Madison agricultural economist Randy Fortenberry says it’s clear that the increasing use of corn to produce fuel has played a role in rising corn prices - but he cautions that the magnitude of the increase has been overstated.
Over the past 18 months, as ethanol production has doubled, corn prices have increased 85% to 100%, but increasing ethanol production is responsible for 25% to 40% of the higher price. That higher cost is all in the corn used to feed livestock - and could be reflected in some of the increases in the price of beef, pork or poultry, according to Fortenberry.
Oh, it’s only 40%! Not a problem, then.
From Jeffrey Sachs:
Jeffrey Sachs, director of the Earth Institute at Columbia University, said Monday that the United States and the European Union should reconsider banking on biofuels.
“In the United States, as much as one-third of the maize crop this year will go to the gas tank, and this is a huge blow to the world food supply, so these programs should be cut back significantly,” Sachs said in Brussels, Belgium.
Top international food scientists recommended last month that the use of food-based biofuels, such as ethanol, be halted, saying that would cut corn prices 20% during a world food crisis.
Sachs is not really a conservative and he has worked for the United Nations, so he should be among the most reputable and trustworthy people on Earth on this issue. (I’ve used his work in my own research, he’s pretty solid.) Sachs reveals that this issue isn’t really that complicated. Less availability of corn for food due to mammoth reallocation of corn (etc) to ethanol simply leaves less corn available. The price will rise to that which can be afforded by consumers who will be willing to pay more for the limited supply. Naturally (economically), this will mean a smaller quanitity supplied.
It’s amazing to see someone like Sachs admit these facts when even he has a financial incentive to state otherwise as someone who wines and dines with international organization bureaucrats.
Last 5 posts by Brian- Simon Harak's September 2003 Speech at Marquette -- And My Official Introduction to Jesuits - June 12th, 2008
- "How Al Gore is Getting Fat off of a Starving World" - June 1st, 2008
- Best column I've read so far on Scott McClellan - May 31st, 2008
- So in other words, you have no leads or suspects at this time? - May 30th, 2008
- RITA GAHAGAN - May 24th, 2008
Posted in US News and Liberal Debacles |
May 12th, 2008 at 12:53 am
The problem is higher fuel prices which are causing higher food prices. Its true that Ethanol might be contributing factor but its not the major cause. What is usually forgotten is that the production of Ethanol has revitalized economies in smaller communities. Take a trip to Western Wisconsin, Southern Minnesota, South Dakota, and Iowa. There were a lot of dumpy towns out there that are turning around. If the production of Ethanol quits, we will have more problems than just higher food prices.
Its fuel prices… get more supply in the market, use less, and get alternative sources than you’ll see things change again. The market will cycle…
May 12th, 2008 at 2:41 pm
Good summary.
I might state that government involvement raises prices and disrupts the markets. The gov pays farmers to not grow, places tariffs on imported ethanol/foods, and pays for artificial use of corn in ethanol. You can add global governments hoarding foods.
But overall, ethanol production for fuel is very inefficient when you add all the energy costs of farming and production. The net energy yield is negative to very low. And, you can not grow enough ethanol to fuel ALL the cars, there is not enough land.
May 13th, 2008 at 9:01 am
@SPET3R
your comment that ethanol has “revitalized economies in smaller communities” completely overlooks the fact that ethanol is heavily subsidized by the government.
The AAA calculates that ethanol has recently cost 20 to 30 cents per gallon more than regular gasoline. Add to this a 51-cent-per-gallon tax credit, without which ethanol would be even costlier.
Also, ethanol costs more to transport than gasoline. With mandates to be used in gasoline is growing outside of the Midwest, the cost of gasoline in general goes up because oil companies are forced to blend this crappy fuel into their own gasoline.