The ethanol industry seems to be on the warpath against bad press (maybe that’s just my impression), which it’s been continuously mired in over increasing food prices, changing land-use patterns, and the questionable environmental benefits of grain-based fuel. As I mentioned last week (Ethanol Industry Pays Off Subsidies, Boosts U.S. Economy), business is booming, and this has potentially emboldened or intensified the pro-ethanol lobby.
He calls the food-vs-fuel debate a “fallacy” that assumes “farmers are incapable of supplying the growing needs for food, fiber and fuel.” Besides, he said, biorefiners only need the starch in feedstocks; the protein provided 14 million metric tons of livestock feed last year.
Dinneen says a study by Informa Economics found ethanol production caused less than 5 percent of the increase in food prices last year. (The study was funded by the Renewable Fuels Foundation, which is linked to the Renewable Fuels Association.)
I wouldn’t go so far as to call it a fallacy since, as Autopia highlights, US grain subsidies are still implicated in world-wide food price increases.
A report this morning from NPR also weighed in on the value of protein byproducts and local economic stimulus produced by the ethanol industry (Listen Here: Ethanol Demand, Prices Boost Farm Communities). In Northwestern Iowa, local farmer Brian Friedrichsen describes:
“We are able to utilize the co-products from the ethanol plant, and so we’ve expanded our cattle operation a little bit every year for the last four years,” Friedrichsen says.
He says the feed from the ethanol plant cuts his costs by $40 to $50 per steer each year, saving him at least $200,000 annually. Friedrichsen estimates that the number of cattle being raised in the area has tripled as a direct result of the ethanol facility.
Farmland is also shooting up in value. A nearby farm sold last year for almost $7,000 an acre. Before the ethanol boom, an acre of farmland here would often go for less than $2,000.
There’s no question that ethanol is here to stay, but with major increases in food-based ethanol are we putting short-term economic gain at the expense of everything else?
NPR (Mar. 4, 08), Morning Edition: Ethanol Demand, Prices Boost Farm Communities, by Jason Beaubien
Autopia (Feb. 27, 08): Ethanol Industry, Bigger Than Ever, Says Its Critics Are Wrong