Share |

Can "Food or Fuel" become "Fuel and Food"?

Corn sells to the highest bidder. When oil goes high, so will corn.
Corn: Fuel or Food?

There is no question that energy consumption continues to increase and the main source of the world's energy is crude oil. Since the early 1970's in the U.S., the nature of using crude oil has been felt, from the Arab oil embargo to the creation of the Trans-Alaska Pipeline System.

Because of (or in anticipation of) the oil energy dependance, many forms of alternative energy have been explored. Solar, wind, and biofuels of many types, including ethanol, have been researched and developed. Using ethanol as a fuel is not new (many of the early cars used ethanol) but serious, systematic production of ethanol in the U.S. did not start until the late 1970's, and with the Energy Policy Act of 2005, the U.S. set itself in a direction of increasing the use of biofuels (mainly ethanol) in gasoline.

The Energy Independence and Security Act of 2007 put serious numbers behind the goal of, by 2015, reducing petroleum consumption by 20% and increasing the use of annual alternative fuel by 10% yearly. This translated into increasing biofuels to 36 billion U.S. gallons by 2022, from 4.7 billion U.S. gallons in 2007. What followed was a boom in corn based ethanol plants in the midwest U.S.

What supported the construction were tax credits and high oil prices. Ethanol plants buying corn in the open market brought increased corn prices and created a double edge for farmers: Greater income for those growing the corn and a greater expense for those that relied corn as feed for animals.

Today the corn as energy and as feed has now come to some level of stability. The ethanol tax credits ended at the end of 2011 and the markets for swine, beef, and poultry are gaining revenue through sources that can accommodate the higher price of feed. But the conversation still continues.

Some corn: feed or fuel resources are a great starting place to better understand the issues. Also, the AgChat conversation on Corn: Food or Fuel offers some insight on the positions various farmers and producers are still working through.

Google Videos Like This