A Brief Lesson On Ethanol And Food Prices

Rapid City Journal

April 5, 2014

By Keith Alverson

We are blessed as Americans to have the safest, most affordable and abundant food supply in the world. Consumers have thousands of choices when it comes to food any time of the year. It’s the American way.

But when it comes to fuel, choice is extremely limited, as the oil industry has had a monopolistic hold on our country. Until just the past decade, there was basically zero choice for consumers. Now ethanol and other biofuels provide the option of an American-made, cleaner-burning, less expensive, renewable fuel.

So it’s troubling when an academic like David Miller (March 15 Forum) ignores the facts with his column, “We shouldn’t use food crops as fuel sources,” and serves up another dose of misinformation about America’s most successful alternative to gasoline.

Does Miller realize humans don’t directly consume the type of corn used in ethanol production? Field corn is much different than the fresh, frozen and canned sweet corn that humans eat and represents 99 percent of the corn grown in the United States.

Ethanol produces feed and fuel. One-third of the corn used for ethanol production is turned into the co-product, distillers grains, a high-protein livestock feed in high demand because it efficiently displaces the need for corn and soybean meal in livestock rations.

Meat prices have reached market highs, and companies like Tyson reap record profits. But when it comes to rising food prices, corn isn’t the culprit; in fact, it has little to do with your grocery bill. For example, corn was $7 per bushel a year ago and this winter it was just $4. Has your grocery bill come down? At $4 per bushel, corn’s value is 18 cents in a pound of beef, 13 cents in a gallon of milk and 6 cents in an 18-ounce box of corn flakes.

Do you know how much of your food dollar goes back to the farm? The answer is about 12 cents, according to the U.S. Department of Agriculture. Statistics show a strong correlation between the price of oil and the price of food as the rest of your food dollar goes towards transportation, processing, packaging and energy.

Food security is vital, but what about energy security? Since 2007 the United States has reduced oil imports by 20 percent. Ethanol now makes up 10 percent of America’s fuel supply and last year displaced 476 million barrels of imported oil; that’s approximately $48.2 billion that would have left the country. And we did this with less than 3 percent of the world’s grain supply.

When it comes to the environment, precision agriculture tools reduce energy usage, emissions and spray overlap. More farmers are optimizing their fertilizer and using lesser tillage practices to prevent runoff and erosion along with buffers and cover crops.

Better yet, South Dakota State University research shows that South Dakota cornfields over the past 25 years have become carbon sinks due to lesser tillage practices and higher yields.

Can oil companies say the same? Google the latest oil spills in Lake Michigan and the Gulf of Mexico for your answer.

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