Food, Ethanol and Oil - 12/28/07

Wheat is at its all time high.  Corn has doubled in the last few years. The American Farm Bureau states it costs 10% more to feed a family compared to a year ago.  The U.N reports not only are food prices rising, but the world’s food supply is shrinking.   How could this happen when the U.S. is the world’s bread basket. 

If the world’s food supply is shrinking has farm output peaked out? 

The surge in corn pricing and production is due to the demand for ethanol.  More corn production caused other commodities like wheat to rise because corn was grown in place of wheat.  Some farmers are making 10 times more on corn because of the demand for ethanol than they did only three years ago.  Farmers will have planted more acres of corn in 2007 than they planted any year since World War II. 

The energy bill passed by Congress the night of December 13, 2007 is demanding an increase in domestic biofuel production by 36 billion gallons by 2022.

Some studies say it will take all or most of the farmland in the U.S. to product enough ethanol to meet Congress’s demands.  So what about food for people and cattle... do we import that?  By 2008 the U.S. ethanol refineries will receive more than double the 60 million bushels of corn estimated by the U.S. Department of Agriculture. 

Another reason food is going up is because of the rise in petroleum.  Agriculture uses 17% of all the energy used in the U.S.  Petroleum based fertilizers, pesticides and herbicides account for more than half the on farm energy use.  Earth Policy Institute states the U.S. food system from the production, transport, packaging and refrigeration uses enough energy to supply all of France’s for one year.  So the increase in petroleum has affected every aspect of agriculture from production to the petroleum based packaging.  As petroleum continues to go up,it will then directly affect the price of food.

Some estimate it takes 1600 miles for farm to you fork.  It will come to the point with ever higher petroleum more food will need to be grown organically reducing the petroleum bases fertilizers, pesticides and herbicides. Food will also need to be grown locally reducing the transportation cost.  Some believe the American way of life will end as we know it.  Go this link on a review on the documentary "End of Suburbia"

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