November 18, 2008

Anti-ethanol group falls flat

The Grocery Gang is having a rough time of it. Even their own leading-question survey doesn't much support its misguided argument that corn-based ethanol should to go away, which it believes would miraculously lower food prices. (Note to self: Corn prices have dropped by more than half; yet food prices are still high. So what gives?)

In fact, in its latest news release, the group said corn ethanol was responsible for only 0.55 percent of the expected 5.5 percent increase in food prices this year.

Okay okay…they actually said corn ethanol was responsible for 10 percent of food price inflation - but they're hoping people can't do the math and discover that 10 percent of the expected 5.5 percent food inflation for 2008 (USDA/ERS) equals only 0.55. They want people to hear "10 percent", not the truth.

So if your box of Ding Dongs went up a dime, they argue, corn ethanol is responsible for a penny of that increase. That's their argument! That's it! A good question is: What's responsible for the other 90 percent of the increase – the other 9 cents I'm paying for my Ding Dongs? (This and/or this?)

Back to the survey - After baiting participants with that misleading information, the Grocery Gang still couldn't get a majority of folks to back away from renewable ethanol. Maybe people saw the holes in their argument. Like this hole or this hole or this hole or this hole or this hole or this hole or this hole or this hole or this hole.

The Gang talks a lot about eliminating "subsidies" (unless those subsidies ensure them a perpetually cheap source of grain). And of course they don't talk about the 90 years of subsidies taxpayers have given the oil industry. (Totaling more than $160 billion, according to this anti-subsidy for anything group. Remember that $700 billion bailout that passed in October? It renewed some oil company subsidies. That is how pervasive it is.)

The Gang and Big Food must prefer oil, which is strange since there were environmental groups at the podium - environmental groups that also mislead and twist facts.

What is really mind boggling is that these environmental activists don't want corn ethanol because they don't want corn period. What would that do to modern animal agriculture?

1 comment:

  1. I am glad your not worried about paying a dime more for Dings Dongs. Putting 20 million acres back into production of food instead of fuel will definitely have noticeable effects food prices and more importantly commodity prices. Food inflation may have only been 5.5 percent but I remember in the summer when corn prices where as high as 7.50 a bushel now it has fallen as the dollar have been picking up strength but it is still wildly overpriced and drowning the agriculture industry in overinvestment. Prices of agricultural land has increased across the board over a hundred percent over the past few year as investors and institutions buy into this ethanol fad. Ethanol from corn is completely unsustainable at ever level. One bushel of corn creates 2.7 gallons of ethanol. The price of ethanol is 1.50/gallon an the price of corn is 3.65/bushel. Without even the cost of conversion from starches to sugar to ethanol the ethanol plant must pay 3.65 for the raw material to produce 4 dollars worth of product. Lets not forget that the conversion requires a great deal of natural gas. While I am on the subject of natural gas, high yielding corn is dependent on high inputs. Necessary fertilizer inputs are created from natural gas. 33,500 cu/ft of natural gas per ton of anhydrous ammonia to be exact. It requires about 150 units or lbs. of nitrogen to farm acre of corn anhydrous ammonia in its pure form is 82 percent nitrogen. It funny how such a sustainable crop requires so much unsustainable resources in order for it to exist. As far as its environmental impact as corn ethanol plants sprung up everywhere they have persuaded several farmers in the midwest to plant corn instead of its planting alternative soybean. The lack of soybeans to meet demand created a surge in soybean prices that convinced another large soybean producer Brazil that it was time to start cutting down more forest to produce the now profitable soybean. Burn off one acre of amazon forest and tell me what the carbon footprint is on that. Here in California along with the rest of the US I have seen farmland prices accelerate to unsustainable levels as overinvestment into agribusiness fueled by the raise in soft commodity prices. As ethanol is discovered to be a worthless venture, because it offers promises it cannot keep, it will fase out and prices will drop. Ethanol from corn is a reckless use of valueable land resources and will eventually be forced to show its true colors.