Say Anything Blog

Is it a major cause? That’s the term he used. The other more important factors:

But Mr. Schafer said that rising energy prices, drought in key producing regions, and rising demand from developing countries such as China and India have played a far more significant role than ethanol, adding that those strains on the world’s food networks can’t be solved overnight.

Those are reasonable observations.

I despire ethanol subsidies as a policy, and it was definitely sold as a way to increase the price for farmers. So it IS a factor.

But I’m also very suspicious of this sudden “world food crisis” which wasn’t a topic even last year. We’re seeing another media craze, simplified reporting that tries to make the United States look bad.

Media craze or not, I think the concern being generated is warranted.  Trying to fuel our energy needs with our food crops is lunacy, and defending such policies is a mistake.

The war against illegal plunder has been fought since the beginning of the world. But how is… legal plunder to be identified? Quite simply. See if the law takes from some persons what belongs to them, and gives it to other persons to whom it does not belong. See if the law benefits one citizen at the expense of another by doing what the citizen himself cannot do without committing a crime. Then abolish this law without delay … If such a law is not abolished immediately it will spread, multiply and develop into a system.

Frédéric Bastiat, The Law

Rob’s recently listened-to songs:

the fact remains that fuel crops are taking up more land that could have been used to expand production to meet supply shortages.

For faithful supports of ethanol to deny this is for them to deny reality itself.

So says the guy who is denying the reality that Ed is saying it doesn’t.  But Rob understands that he has the right to his opinion, but makes the mistake of confusing it with the idea that he has the right to his own facts....and that nobody else’s facts, matter.

I’ll bet I can sell Ed one of my perpetual motion machines, since he seems to love a good scam.

Pom, I did a story on this on how much the corn diverted to ethanol affected world wide grain stocks.

It appears that the total amount of corn diverted to ethanol production in the US is about 60% of the drop in the stockpiles. 

Now it seems that the growth of ethanol would be more to blame than the outright number.  After all if an ethanol plant has been producing for 20 years, that amount of corn has been grown for it year after year.  It wouldn’t explain the new shortage.

Still ethanol has increased a lot in the last couple years.  Couple that with the fact that the Europeans are doing the same thing.

I think it’s fair to say that ethanol is a major factor in the runup in price along with the reasons that Schafer.

The other thing is that ethanol is THE only factor that is controllable by the American people. 

So highlighting ethanol in the world food situation is appropriate I believe. 

And like Rob I have enormous respect for Ed Schafer.  I think he’s wrong here.

The Debate is over!  Global Whining has been confirmed.

My wifes family farms a significant amount.  It has absolutely driven up the cost of corn.  Why would he say this?

I have moderate confidence in Ed.  I’ve seen him be brilliant, I’ve seen him stuff his head up his ass.

This appears to be the latter.

Rob, If you want to go through their analysis and point out problems with it, that’s one thing.  Otherwise you are just denying the conclusion in the absence of a quantitative counter argument.

However, nobody here, myself included, is arguing that we should do otherwise than reassess our current alternative energy policies.  That includes corn subsidies that drive up corn prices, and ethanol subsidies to counter balance the increase corn prices associated with corn subsidies, import tariffs on Brazilian biofuel and so forth.

Whistler can you link where you get the 60% number from?  That sounds way too high, if you consider total corn stocks, rather than just feed corn.  I think the real number is closer to 10% (once you factor in that roughly 1/2 of the biomass used in ethanol conversion gets turned into a food source for cattle).

Finally, ultimately if you are to argue that corn for ethanol has supplanted other crops, you need to show in figures that they have materially affected our production of those crops (as opposed to e.g., cold weather or drought).  US wheat production actually increased last summer in spite of the use of some farm land for corn for ethanol, and would have been even higher had it not been for drought.. Clearly that undermines any such argument.

Part of how that happened is the reduction by about 20% in the number of acres in the US conservation program (an area as I’ve pointed out currently the size of the state of New York).  And part is rising demand for food have made more total acreage profitable to grow crops on.

If ethanol is a legitimate energy source, it should be viable in a free market, sans subsidies.

Why do we have our shorts in a twist over ethanol subsidies?  Aren’t Gov. subsidies designed to just get a product or an idea off the ground?  like the CRP?

oh, wait....

at least with ethanol subsidies we get something on the other end.

we are providing subsidies for wind, coal, oil...you name it there is a program for it.  I think there might have even been something in the pot for starting a fish farm....

Carrick here’s the post where I covered that.  It was from the Economist.  Right now the link isn’t working.

I believe I got the link from Jerry Pournelle’s blog.

The Debate is over!  Global Whining has been confirmed.

It finally came up, so here’s the link directly.

The Debate is over!  Global Whining has been confirmed.

Whistler, I don’t see that number, but here is their comment, which amounts to a recapitulation of “standard wisdom”:

Ethanol accounts for some of the rise in the prices of other crops and foods too. Partly this is because maize is fed to animals, which are now more expensive to rear. Partly it is because America’s farmers, eager to take advantage of the biofuels bonanza, went all out to produce maize this year, planting it on land previously devoted to wheat and soyabeans. This year America’s maize harvest will be a jaw-dropping 335m tonnes, beating last year’s by more than a quarter. The increase has been achieved partly at the expense of other food crops.

This latter is the same false claim that other people have made, who haven’t gone back and looked at the actual production numbers.  Any decrease in US production have not been associated with less land planted, but with poor weather the last year.

And keep in mind, this is 1/3 of US corn according to this article.  Since 50% of that gets recovered in feed stocks, that means 1/6 of the US corn supply is affected.  What percentage of global agricultural activity does that represent?

Again, I’m not arguing the viability question here, just like Pom, I’m merely pointing out this is typical media hype written by reporters too lazy to research their own stories.

Those numbers are in the sixth paragraph under the graph.

The Debate is over!  Global Whining has been confirmed.

If ethanol is a legitimate energy source, it should be viable in a free market, sans subsidies.

Kevin, I agree, with caveats.  Startup costs and capital is an issue.  Nuke plants would be a case in point.  However, if they get money from the guvmint to just do a rehash of the same design that’s been in use for 4000 years, I’m ticked!  I want full passive solar plant with robotic workers for the money we’re putting into this!

Whistler, obviously that 60% number isn’t quoted directly, so can you explain how you arrived at this statement?

It appears that the total amount of corn diverted to ethanol production in the US is about 60% of the drop in the stockpiles.

Unless you are using this:

This year the overall decline in stockpiles of all cereals will be about 53m tonnes—a very rough indication of by how much demand is outstripping supply. The increase in the amount of American maize going just to ethanol is about 30m tonnes. In other words, the demands of America’s ethanol programme alone account for over half the world’s unmet need for cereals. Without that programme, food prices would not be rising anything like as quickly as they have been. According to the World Bank, the grain needed to fill up an SUV would feed a person for a year.

This argument as I’ve pointed out doesn’t fly, because it is assuming a zero-sum economics that certainly doesn’t apply at this point to agriculture, due to the availability of reserve lands that are currently being used.

Based on what I’ve read, grain prices would be going up regardless of whether the US had an ethanol program: increased demand and massive crop failure account for part of this.  I tend to accept the studies that suggest that currently ethanol is a “major cause” of the surge in food prices.  (I don’t use “food shortage” because that is mostly an artifice of media reporting, rather than an objective reality.)

That said it is fair to explore the effect of future growth in the ethanol industry, assuming that it survives the current spike in food prices.  As I’ve pointed out in other comments, the model for corn for ethanol assumed the (now obviously flakey model) that food prices would remain at their 1990 lows.

Sorry I meant to say “ I tend to accept the studies that suggest that currently ethanol is nota ‘major cause’ of the surge in food prices.”

From the article, I note that Schafer is pretty harsh on the current farm bill and on subsidies in it for rich farmers (corporate owners mostly).  Good for him.

“ I tend to accept the studies that suggest that currently ethanol is not a ‘major cause’ of the surge in food prices.”

For something like food that is only minimally overproduced a small decline in production or shipping can create a drastic short term problem.  It’s impractical and expensive to store large amounts of rapidly decaying food around for emergencies, any excess is wasted. 

IMO we’re seeing a few minor and not so minor blips adding together to create horrible problems in borderline areas (coincidently non-democratic.) With food production, it’s doubly bad because that takes 2-5 seasons to work out.