Ethanol's need for corn could trigger food crisis
By ERIC PETERS
WASHINGTON -- Want a bountiful stock tip for 2007 that will make you grin from ear-to-ear next December? Sock a lot of your seed money into Kellogg's, General Mills, Beatrice Foods, Archer Daniel Midland and Cargill.
Corn, once again is king! The humble grain that has turned thousands of hard-scrabble Midwestern farmers into millionaires over the decades is about to skyrocket in both popularity and price because of the nation's suddenly insatiable thirst for ethanol.
That's the word from Lester R. Brown, the chief deep-thinker at the Earth Policy Institute, a little-known Washington think-tank with an excellent track record for spotting potential environmental disasters.
Troubled by the dramatic increase in corn acreage devoted to ethanol rather than food, Brown is urging a moratorium on new ethanol distilleries just as Democratic congressional leaders are proposing to tax Big Oil and divert the revenues to subsidize more ethanol production.
Brown says a distillery moratorium is urgently needed because new projections forecast that the global auto industry's appetite for corn-based fuel will rival that of humans by 2008.
"The unprecedented diversion of the world's leading grain crop to the production of fuel will affect food prices everywhere," Brown said. As world corn prices rise, he notes, so do those of wheat and rice as consumers look for tasty substitutes and farmers compete for increasingly scarce croplands.
Brown says that investment in fuel ethanol distilleries has soared since the late-2005 hike in crude oil prices -- so much so in fact, that the federal government's collection of pertinent data has been left in the dust.
A compilation by his Earth Policy Institute showed there were 116 U.S. ethanol distilleries in production using 53 million tons of grain annually at the end of last year with 79 under construction with a capacity to devour an additional 51 million tons of grain.
In addition, designs for more than 200 new ethanol plants were on the drawing board and 11 existing ones were being expanded. Brown worries that the uncontrolled growth of Big Ethanol will wreak havoc on the global economy with near apocalyptic implications for the world's nearly 2 billion chronically malnourished people.
The U.S. corn crop currently accounts for 40 percent of the global harvest, but a whopping 70 percent of the world's corn exports. Iowa alone exceeds the entire corn production of Canada and so does Illinois, which ranks a close second.
With corn supplies tightening fast, Brown says rising prices will hit not only products made directly from corn such as breakfast cereals, but those from animals who rely on corn for their sustenance -- including pork, poultry, beef, milk, eggs and cheese.
The automotive demand for corn-based ethanol is nearly insatiable. Filling a 25-gallon tank on one mid-size vehicle consumes enough grain to feed an Egyptian peasant for a full-year. Yet converting the entire U.S. grain harvest -- corn, rice, wheat, barley and oats -- to ethanol would supply only 16 percent of America's motoring fuel.
What's worse, ethanol is not even an effective substitute for gasoline.
Soaring food prices
Brown predicts that the soaring food prices triggered by the ethanol splurge will spark urban food riots in many of the world's smoldering tinderboxes, including Indonesia, Egypt, Algeria, Nigeria and Mexico -- igniting even more anti-Western sentiment.
"The world desperately needs a strategy to deal with the emerging food-fuel battle," Brown says. "As the leading grain producer, grain exporter and ethanol producer, the United States is in the driver's seat. We need to make sure that in trying to solve one problem -- our dependence on imported oil -- we do not create a far more serious one: chaos in the world food economy
Lester Brown's sage words ought to be heeded by new House Speaker Nancy Pelosi and new Senate Majority Leader Harry Reid. And the Earth Policy Institute's new report ought to be distributed as "required reading" to those members of Congress ever anxious to pander to the desires of Big Agriculture.
Eric Peters is an automotive columnist for The Army Times and The Navy Times. Distributed by McClatchy-Tribune Information Services.