Ensia Report On Food Supply Is Wrong On Biofuels

  • Friday, 14 November 2014 00:00

Once again, biofuels are blamed for high food prices. The University of Minnesota's environmental solutions magazine, Ensia, ran a story Wednesday addressing future food supply needs that incorrectly blamed biofuels for pushing food prices upwards.

In particular, the story concluded, "Stop diverting so much of our food and feed to biofuel production, which the National Academy of Sciences estimated was responsible for 20 to 40 percent of the 2008 price spikes. The Food and Agriculture Organization’s food projections do a poor job of incorporating biofuels, and biofuels are one of the leading nonfood uses of agricultural land. According to the International Energy Agency, crop-based biofuels demand will grow 150 percent by 2035 if we don’t change our policies. Government consumption mandates, such as the U.S. Renewable Fuel Standard, must be scaled back, an action that can do far more to keep food prices in check than investing in expanded agricultural commodity production."

Before we rebut the erroneous conclusions the story made, let's get over one salient point. This story was't written by some objective reporter or anyone from the University of Minnesota. This story was written by Timothy Wise of Tufts University and Kristin Sundell from Action Aid, an organization that has a long history of opposing the biofuels industry. As for Tufts University, it has written papers blaming ethanol for high food prices in the past.

So this story was written by authors who have had an agenda against biofuels for quite some time. But we'll address their erroneous conclusions anyway.

Let's start with high food prices in 2008.

In 2010, the World Bank (yes, that World Bank) concluded high food prices in 2008 was the result of increased speculation in the commodities market by investment funds. It noted that data in 2008 showed high corn prices even when ethanol usage was on a downward trend. 

If that isn't enough, we'd also like to point out that when corn prices hit over $7.50 a bushel in 2008, ethanol production that year was 9.3 billion gallons. This year, we're on track to producing 13.9 billion gallons of ethanol. And the price of corn? $3.80 a bushel. We'd like Wise and Sundell to explain this to us.

As for the report by the National Academy of Sciences cited by the authors, the RFA, back in 2011 (yes, Action Aid has been using that report to slam biofuels for some time) said Action Aid "grossly misrepresented" the findings of that report.  Instead, as the RFA pointed out, the National Academy of Sciences report said in its preface, "..our clearest conclusion is that there is very high uncertainty in the impacts we were trying to estimate. The uncertainties include essentially all of the drivers of biofuel production and consumption and the complex interactions among those drivers: future crude oil prices, feedstock costs and availability, technological advances in conversion efficiencies, land-use change, government policy, and more."

To further educate Wise and Sundell, we'd like to direct them to the recent USDA report that shows corn production for this year will clock in at a record 14.4 billion bushels. Of this amount, corn used for ethanol will total 5.15 billion bushels or 35% of total crop output. But since 30 percent of every bushel of corn used to produce ethanol gets used to produce dried distillers grain (a high-protein animal feed), only 3.61 billion bushels of corn or 25% of the total crop output is used for ethanol. Hardly seems like our agriculture industry is producing corn for fuel instead of food.

Last but not least, we'd like to point Wise and Sundell to the fact that food prices didn't drop when corn fell to $3.20 a bushel in October. In fact, seeing as to how the price of corn these days is about half of what it was in 2008, have food prices fallen in tandem? But as they say, don't let the facts get in the way of a good story.