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Ethanol to bump up food prices
Demand for fuel cuts into corn crop
Libby Quaid, Associated Press
WASHINGTON – Ethanol will devour 50 percent more corn this year, eating into the food industry’s share of the crop, the Agriculture Department said this week.
From breakfast cereal to beef to beer, competition from ethanol could raise prices for all kinds of foods.
People don’t eat the kind of corn that makes ethanol, but cows, pigs and chickens do. And people eat other grains that will become less plentiful as farmers plant more corn. Demand for ethanol is pushing feed prices higher and enticing farmers to switch from other crops.
Farmers are expected to grow a record 12.2 billion bushels of corn in 2007, said Keith Collins, the department’s chief economist. An estimated 3.2 billion bushels will go into ethanol, up from 2.15 billion in 2006.
“Even with that increase, we think production will fall short of demand,” Collins said during the department’s annual Agriculture Outlook Forum.
Agriculture Secretary Mike Johanns downplayed any impact on food costs, saying the department anticipates increases of 2 percent to 3 percent every year.
…The chairman of the House Agriculture Committee said higher food prices aren’t all bad.
“Frankly, we have been underpricing our food in this country,” said Rep. Collin Peterson, D-Minn. “What this fuel thing is going to do is cause us to re-price our food to some extent. So consumers are going to pay more, and in my opinion, they should be, because we’ve been subsidizing them.”
(3 March 2007)
Related from the CBC: Oil, grain prices now on same track: ag economist.
Attack of the cereal killers
Graham Harvey, Guardian
The rising price of wheat – driven by speculative interest in biofuels – will do nothing to help farmers or the environment.
Britain’s farmers, in conference in Birmingham, have found something to smile about at last. Thanks to a growing demand for biofuels, the price of wheat – which has been moribund for years – has climbed by more than 50% within the past 12 months.
City investors have begun talking of soft commodities – the great global farm products such as corn, wheat and soya – as the hot new stock. As dealers scramble to convert their bonuses into real estate, the price of farmland, both with and without houses, is rocketing. It jumped by an average of 18% in the second half of 2006.
But despite the hype the commodity boom will do nothing to improve the nation’s health. Nor will it improve the lot of most farmers. Though Prince Charles may deplore the influence of McDonalds on food standards, the seemingly unstoppable rise of commodity agriculture has done far more harm to Britain’s diet and countryside than all the fast-food chains combined.
Commodities are not the same as foods. Nutritionally, they are often inferior, and their highly-mechanised production damages the environment and impoverishes rural communities. Before celebrating the change in fortune of the country’s arable barons, it might be worth questioning whether it’s really in the national interest.
Graham Harvey is a Bangor college agricultural graduate who became a reporter for Farmers Weekly. (Bio)
(2 March 2007)
DOE Selects Six Cellulosic Ethanol Plants for Up to $385 Million in Federal Funding
U.S. Department of Energy
U.S. Department of Energy (DOE) Secretary Samuel W. Bodman today announced that DOE will invest up to $385 million for six biorefinery projects over the next four years. When fully operational, the biorefineries are expected to produce more than 130 million gallons of cellulosic ethanol per year. This production will help further President Bush’s goal of making cellulosic ethanol cost-competitive with gasoline by 2012 and, along with increased automobile fuel efficiency, reduce America’s gasoline consumption by 20 percent in ten years.
“These biorefineries will play a critical role in helping to bring cellulosic ethanol to market, and teaching us how we can produce it in a more cost effective manner,” Secretary Bodman said. “Ultimately, success in producing inexpensive cellulosic ethanol could be a key to eliminating our nation’s addiction to oil. By relying on American ingenuity and on American farmers for fuel, we will enhance our nation’s energy and economic security.”
(28 Feb 2007)
BioenergyWiki – Sustainability standards
This page provides information on ongoing processes and initiatives to develop sustainability standards for bioenergy and biofuels. These are mostly multi-stakeholder initiatives, which try to bring representatives from civil society, business, government, farmers and academia together to develop standards that ensure that the true potential of bioenergy for all groups is realized, while protecting our social and environmental heritage for later generations.
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The Ethanol Scam
Robert Bryce, CounterPunch
The ethanol scam just keeps getting more and more absurd. In January, three U.S. senators two Democrats, Tom Harkin of Iowa and Barack Obama of Illinois, along with Indiana Republican Richard Lugar introduced a bill that would promote the use of ethanol. It also mandates the use of more biodiesel and creates tax credits for the production of cellulosic ethanol. They called their bill the “American Fuels Act of 2007.”
The most amazing part of the press release trumpeting the legislation is its fourth paragraph, in which Lugar declares that “U.S. policies should be targeted to replace hydrocarbons with carbohydrates.”
Let’s consider that for a moment. In the 18th and 19th centuries, the U.S. economy was primarily based on carbohydrates. For most people, horses were the main mode of transportation. They were also a primary work source for plowing and planting. Aside from coal, which was used by the railroads and in some factories, the U.S. economy depended largely on the ability of draft animals to turn grass and forage into usable toil. America’s farmers were solely focused on producing food and fiber. And while the U.S. was moderately prosperous, it was not a world leader.
Oil changed all that. After the discovery of vast quantities of oil in Texas, Oklahoma, and other locales, America was able to create a modern transportation system, with cars, buses, and airplanes. That oil helped the U.S. become a dominant military power. Humans were freed from the limitations of the carbohydrate economy, which was constrained by the amount of arable land.
(2 March 2007)