Actual facts -- food vs. fuel

[LAPTOP GAMER]

I too get so sick of the media blaming Ethanol for high food prices, when in reality of the millions of cars on the road a small fraction use E 85.

[TORRED1]

I listen to XM while driving around for work, and everyone from Glen Beck, Mike Mcconnell, and Shan Hannity, are all spouting the same thing, ethanol bad, you hear it on the news, ect ect. But if you listen and just pull out the facts( drought conditions around the world causing higher prices, because other countrys are buying our corn and grain). And it seems like the oil companys are doing their best to put out the negative spin, I chuckle to my self every time I listen to them. The facts are their you just have to find them, Thanks hoosierRon for getting them out to us

[SNO]

Any time someone mixes historical information and forecasts for comparison purposes, I wonder what "facts" are being withheld.

While it's true that soybean and wheat acres are up this year, the OP fails to mention that corn acres are down. Instead, we get that 5-year history (which I can't find USDA data to support).

And March weather negatively affected 50% of the TX wheat crop and 20% of the OK and KS crops. Other states were impacted to lesser extents. So you can pretty much forget about any price relief from the 'extra' acres this year.

Finally, just look at that 13% reduction in cotton! Want to make any bets as to what crop they are growing instead? Hint: it's corn.

I've bolded a few lines of info from this USDA report:

WASHINGTON, Mar. 31, 2008 - On the heels of last year’s record-high corn production, U.S. farmers intend to plant 8 percent fewer corn acres in 2008, according to the Prospective Plantings report released today by the U.S. Department of Agriculture’s National Agricultural Statistics Service (NASS). Producers plan to plant 86 million acres of corn this year. While 7.6 million acres less than 2007, this would still be the second-largest area since 1949.

The outlook for corn prices remains strong, thanks to increasing ethanol production and other factors. Still, favorable prices for other crops, along with crop rotation considerations and high corn input costs, are motivating some farmers to switch from corn. Iowa is expected to see the largest decrease in corn acreage, down 1 million acres from last year’s record, to 13.2 million acres. Both Indiana and Minnesota are expected to drop 800,000 acres from their record highs of last year.

Nationwide, soybean acreage is expected to jump 18 percent, to 74.8 million acres. This is an increase of 11.2 million acres from 2007 and is just 1 percent below 2006’s record high. Acreage increases are expected in nearly every state, with the largest growth in Iowa, up 1.25 million acres, and Nebraska, up 1.2 million. Increases of at least 800,000 acres are anticipated in Indiana, Minnesota and South Dakota, while Kansas, New York and Pennsylvania are expected to plant their largest soybean crops in history.

Wheat acreage is also expected to rise in 2008, up 6 percent to 63.8 million acres. Winter wheat planted area, at 46.8 million acres, is up 4 percent from last year. Expected acreage of durum wheat is up 22 percent, to 2.63 million acres.

NASS estimates 2008 cotton plantings at 9.39 million acres, 13 percent below last year. Upland cotton acreage is expected to total 9.19 million, the lowest level since 1983 and down 13 percent from last year. The largest acreage declines are expected in Arkansas, Mississippi, Tennessee and Texas.

The Prospective Plantings report provides the first official estimate of U.S. farmers’ planting intentions for 2008. NASS’s acreage estimates are based on surveys conducted during the first two weeks of March from a sample of approximately 86,000 farm operators across the United States. Prospective Plantings and all NASS reports are available online at www.nass.usda.gov

[chinamonty]

Can someone post the figures of how much corn is used to feed livestock and the cost differential over the last two years please. The cost changes are a very complex matrix and ever vested interest group tries to manipulate them to back up their own arguements which is fair enough. I am glad we getting figures posted but I would rather not see % ages since 50% of not much is still not much but 50% of a lot is still a lot. Both have reduced by 50% and aren't comparable. (Lies Lies and statistics)

[nailhead425]

After corn is used for Ethanol it can be, and in many cases is, dried and used as animal feed. The sugars used to produce Ethanol would otherwise be Methane gas (Cow and Pig farts).

Dent corn is the majority of harvested corn. The overwhelming majority.

[SJZ3]

Originally Posted by BBDOS CV8

Amenicans probably don't see it on their 'fair and balanced' news coverage, but this week there've been food riots across Asia and Africa due to shortages of various staple crops. No, biofuels are not the only cause. But if you have shortages due to natural disasters and climactic change, exacerbating them so the first world can buy cheap gas is probably ethically questionable.



I don't think it's in anyone's interest to be seen as serial deniers on this. If ethanol can be made from detritus left from food or wood or organic processing I am all for it. But every pound of corn diverted so Americans can drive Silverados (or sugar so Australians can drive V8 Commodores) cheaper, increases price pressure on the remaining pool of food.

America is exporting more food to countries like Iraq because you conquered it and to the victors go the spoils. And crops have failed in large export countries like Australia due to our 8 year drought drought, which means there is more demand.

I think you are being somewhat myopic.

The demand for ethanol created what was essentially a new price floor for corn crop. Farmers knew that if they couldn't sell their harvest as food, they could always go back and sell it to an ethanol plant.

This guaranteed price caused many farmers to grow more corn then they have in the past. Prices would have normalized, except that other places around the world had crop failures along with surging demand from developing economies.

Its shortsighted to now claim that ethanol is causing food shortages. In all liklihood if the US government had not mandated ethanol usage corn crops would have remained flat or possibly declined in the last couple of years instead of rising. It is just as likely (or more likely IMHO) that if there was no demand for ethanol, the US would have actually grown far less corn, and the current food shortages could actually be worse.

However, there is no way to know for certain. As yet, scientists have not discovered a way to travel to parallel universes (or to the future). Its all a guessing game. However, what we do know for sure is that with the rise of ethanol the production of corn has skyrocketed, and in fact the net production feed corn (which excludes ethanol corn) has also risen dramatically. Therefore, it is safe to assume the ethanol is not in fact the cause of the price increases. The blame being placed on ethanol are completely unscientific guesses by wall street analysts, who get paid to come up with simplistic answers that sound good on TV or in 3 paragraph newspaper articles.

[SNO]

Originally Posted by chinamonty

Can someone post the figures of how much corn is used to feed livestock and the cost differential over the last two years please. The cost changes are a very complex matrix and ever vested interest group tries to manipulate them to back up their own arguements which is fair enough. I am glad we getting figures posted but I would rather not see % ages since 50% of not much is still not much but 50% of a lot is still a lot. Both have reduced by 50% and aren't comparable. (Lies Lies and statistics)

I can dig up the actual acreage or yield values if you want. But I think this should suffice to show the crop distribution and price increases.

From this USDA publication:
http://www.ers.usda.gov/AmberWaves/F...CornPrices.htm
(contains the cornflake facts too!)

2007 corn usage:
~19% for ethanol production
~55% for animal feed
~20% is exported
~4% for consumer, seed and industrial uses

Corn went from under $2 per bushel in 2005 to $3.40 per bushel in 2007

[SNO]

Originally Posted by SJZ3

However, there is no way to know for certain. As yet, scientists have not discovered a way to travel to parallel universes (or to the future). Its all a guessing game. However, what we do know for sure is that with the rise of ethanol the production of corn has skyrocketed, and in fact the net production feed corn (which excludes ethanol corn) has also risen dramatically. Therefore, it is safe to assume the ethanol is not in fact the cause of the price increases. The blame being placed on ethanol are completely unscientific guesses by wall street analysts, who get paid to come up with simplistic answers that sound good on TV or in 3 paragraph newspaper articles.

You can't dismiss claims contrary to yours as "unprovable" (sans parallel universe) then definitively declare your position as fact. Unless... do you live in a parallel universe?

[SJZ3]

Originally Posted by SNO

You can't dismiss claims contrary to yours as "unprovable" (sans parallel universe) then definitively declare your position as fact. Unless... do you live in a parallel universe?

Work on your reading comprehension. I didn't claim my opinion as fact.

I posted what I think about the issue, and illustrated the logic behind my reasoning.

Personally, I think the fact that a couple billion people in developing country are rising out of poverty is going to have a greater effect on food prices then the relatively small amount used for ethanol, especially when it is a fact that non-ethanol corn production has increased after the development of ethanol.

See how it works? Facts support the opinion, not the other way around.

I was listening to the radio on my way to work this morning, and the host was saying how you can't "blame" the rising middle class in these other countries for the higher food prices because that would be unethical and we should be proud of these folks.

I get the impression his type of thinking is at the root of the problem with this discussion. Whereas I am simply looking to objectively explain the reason food prices are higher he, and most other people I hear discuss the issue, is looking for something to "blame."

When I say the reason food prices are higher is far more likely due to the increased demand from the rising global middle class I am not "blaming" anyone, just simply looking at reality. The people in India, Russia, Brazil, and China have just as much right as us to bid for these commodities on the open market, and as supply relative to demand shrinks the price is going to go up. It is not the governments job to purposelly limit the uses of these commodities so that starving people in Africa can have more food then they are able to afford. That sounds harsh, but that is reality.

However, when I hear people "blaming" ethanol, without any factual data to support their opinion, I absolutely hear them looking to assign blame and then asking the government to intervene. These type of people are not interested in fixing the problem (if there even is a problem), they are simply looking to create nice soundbites that can be digested by their viewers in nice, simple, easy to digest 30 second chunks.

If you want to buy into that type of thinking and mentality, go right ahead. It an unusual circumstance, but this issue seems like something the government is getting right (and I am talking from George Bush to Barack Obama and all the people in between) while TV talking heads and wall street analysts seem to be getting wrong.

[t-rex]

Originally Posted by 63GrandSport001

The only issue with our food prices is last I checked most of the increase in our food comes from oil being over $100 a barrel is fossil fuels is used in pretty much every step from our food being planted, the fertilizer and apply of it, harvesting, transporting, the packages use oil..............

Amazing how only a handful of people out of a nation of 300 million are able to grasp this very simple and logical precept of Econ 101...

[psece]

Originally Posted by t-rex

Amazing how only a handful of people out of a nation of 300 million are able to grasp this very simple and logical precept of Econ 101...

Hey, some of us just stay in the Grandstands and watch the parade

[Knucklehead]

Originally Posted by 63GrandSport001

Its election season................

Many in the GOP are making money off of oil and want biofuels to go away as they threaten their oil profits......

They are on purposely putting out false information about the increased cost of food being from the increased use of bio fuels. Most Americans are not going to double check on this info and the mainstream news media will not report on it (smaller media outlets will and they are talking about it).

Yeah, and the Democrats don't own any mutual funds/stocks/commodity funds/hedge funds either --- pure as the driven snow..... I really wish that people would quite politicizing a economics/demand scenario.

Producing our own oil/alternatives is the key. The economic situations in this country are directly tied to our ability to get natural resources at reasonable costs. If we had our own oil, it would still be priced at market levels however our own oil companies would be paying taxes to us on the oil sold, not sending it overseas to terrorist oil company.

[Klay]

It is possible I am wrong on this but it seems to me food prices can be stablilized a bit more if corn products weren't used so heavily in our food supply.

Before, farmers had trouble making money on corn products, so they lobbied the government into mandating that corn would a be a major base for our food supply. Therefore, since farmers have found more uses for corn outside of food (ethanol), it isn't necessary to use as many corn based products for the food supply.

Again, this could be wrong but I could have swore I learned about this in some of my economics classes.

[psece]

I can say that there was a lot of land not being used because the price didn't support it. Case in point: Australian Drought and bad decisions by the Japanese and Chinese have made the price of rice go up. I have now seen fields in my area that I didn't even know were capable of growing rice flooded. I am talking on a huge scale. If it is worth it to farmers, they will grow it.....

[chakis24]

Originally Posted by agman25

6-7 gallons of gas. What are you smoking. You get 30% less mileage with ethanol at point of use. Even if not a drop of gas or diesel was used to farm the corn, move it to the distillers and distribute ethanol to the pumps you would be displacing 0.7 gallon.

Both coal and natural gas can be converted in synthetic fuels directly. That gives a much higher "energy" yield without wasting a lot of resources and tying up farmlands.

the ONLY reason you get worse mpg in an E85 engine is because that engine is not optimized for ethanol- it runs on both gas and ethanol. an engine that is engineered to run solely on ethanol is no different in anyway than one that runs on gas.