USDA Says Ethanol Accounts for Only 3% of Increased Cost of Food
On Monday, USDA officials met with reporters to discuss just how closely biofuels (specifically corn-based ethanol) are linked to the increasing price of food. Agriculture Secretary Ed Schafer, who has vehemently defended biofuels before, had this to say:
One theory that has been widely discussed in recent weeks is that the nation’s growing demand for biofuels and the crops needed to produce them is the real culprit behind higher food prices, both at home and abroad. Yet the evidence that we have seen. . .does not support this.
It’s true that higher demand for corn for ethanol and soybeans for biodiesel has led to higher prices for those crops over the past couple of years. But we do not have a one on one relationship between higher prices for those commodities and what consumers are paying for foods at the retail level. There are many factors at work. . .
So just how much is ethanol contributing to global food prices? According to Schafer:
On the international level, the President’s Council of Economic Advisors estimates that only 3 percent of the more than 40 percent increase we have seen in world food prices this year is due to the increased demand on corn for ethanol.
Their reasoning includes things I’ve written about before including oil prices, economic and dietary expansion in India and China, droughts affecting wheat crops, etc.
For more, read the USDA’s biofuel briefing in its entirety or watch the video:
So, what about Algae? There’s more to benefit from that than ethanol, right?
Samurai Fox: There’s definitely more benefit to algae if we can produce it economically. As far as I know, right now, biodiesel produced from algae is about $20 / gallon.
I’ve written several posts on the topic (see Algae category to right):
http://gas2.org/2008/03/29/first-algae-biodiesel-plant-goes-online-april-1-2008/
http://gas2.org/2008/04/25/could-we-grow-100000-gallons-of-oil-per-acre-yes-says-vertigro-algae-biofuel-video/
Can we hire foreign algae from china to make ethanol for less money. 20$ a gallon seems a bit steep to me.
Do you believe what the USDA said about the minimum bost in food prices caused by ethanol? With the knee jerk reaction to subsidies for ethanol, I cannot trust anything the U.S. government says. What about transportation costs for hauling the ethanol to the east?
As John Stossel would say: “Give Me a Break”
I feel like one step that is being overlooked in the US is the need to transfer agriculture vehicles like tractors and harvesters into E85. Which in the long term will be important to reduce our use of oil in the production of E85.
Northgaredeck although that is a valid concern wouldn’t you imagine it is cheaper to haul from the Midwest to the east than from current oil exporters like the Middle East, South America and Alaska?
Great post, I agree. Ethanol isn’t even an issue when it comes to food usage. People talk about it as if it were by making ridiculous claims, but the fact is that Ethanol production is only using up a small bit of our agricultural output.
I’ve read that something like 80% of US corn goes to feed livestock! And it’s not even good for them. If the alcohol were removed before feeding it to the poor cows they would be much much healthier. And we’d have the alcohol.
The only reason big oil is behind Ethanol gas additives is the 10% Ethanol mix drastically reduces gas mileage.
We pay more for gas, because the 10% Ethanol mix makes you burn more gas/Ethanol.
It’s a win, win for big oil.
>>If the alcohol were removed before feeding it to the poor cows they would be much much healthier. And we’d have the alcohol.<<
LMFAO, I heard the swoosh break the sound barrier as it flew over your head.
Why not just put the cars on electricity? It works, there’s actually no gas involved (E85 has 15% gas mixed in, electric cars can get their juice from solar or nuclear power plants) and its just gonna get easier, and more inexpensive to use.