February 6

The price of corn

5  comments

corn-ear-husked-web.jpg
One of today’s New York Times editorial pieces discusses the price of corn. It appears that the price of a bushel of corn is more than 150% greater than it was a year ago. And this despite record harvest. Why? One reason is the demand for ethanol. Another is a smaller corn reserve than usual, and yet another is that commodities are the hot new investment opportunity for speculators.

It’s tempting to assume that the effect of sharply higher prices is confined primarily to the agricultural sector. But where corn is concerned, we are all part of the agricultural sector. The historical cheapness of corn has driven it into nearly every aspect of our economy, in the form, most familiarly, of corn syrup. The low price of corn over the past half-century lies at the very foundation of America’s historically (and unrealistically) low food prices.
we are entering a new dynamic now. While there has been talk recently about refining ethanol from sources other than corn, that could take a while. So at the moment what we are trying to do is gratify those appetites from the same resource: agricultural land. No matter how high prices go, what will need to change isn’t the amount of corn acreage available or even the size of the enormous harvests we are already getting. What will need to change is the size of our appetites.

Or perhaps we can change the direction of our appetites. No one consuming a quality low-carb diet filled with grass-fed meats, green leafy and colorful vegetables, and low-carb fruits eats much corn. Everyone is always exhorting us to conserve oil by driving more gasoline efficient cars, turning down our heat, etc.; let’s start a movement to conserve corn by, well, not eating it. Corn works much better to power cars than it does to power us.
Avoid corn, save American agriculture. Or depending on your feelings about capitalism–quit eating corn and ruin a speculator.


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  1. Aright! Finally the market forces align on OUR side. Gonna run right out and drive something to create more demand for fuel.
    Soybeans make good mechanical fuel too, don’t they?
    Can’t wait to see Con-Agra stations around the country.
    Marilyn
    Hi Marilyn–
    There are already the equivalent of Con-Agra stations around the country–they sell biodiesel, which is made from vegetable oil.  People who drive diesel cars can, with a modification that doesn’t cost too much, use this fuel in place of fossil fuel diesel.  Here is the website of the national organization.
    Cheers–
    MRE 

  2. Anyone figure out whether ethanol is still competetive once they remove the corn subsidies from the equation?
    I’m all for green energy but looking at the recent stories about clear-cutting rain forest in Indonesia to grow palm trees for palm oil, which is used as a biofuel for electrical production in Denmark and other European countries, I’m not sure we’ve really got it all thought out just yet. Not to mention the large areas of peat they are also burning in Indonesia to prepare that land for palm trees that have turned Indonesia into the third largest carbon producer (after US and China) in the world.
    Aparently there is a big debate underway around the supposedly “green” fuel being used in Denmark. Apparently people didn’t consider where it was coming from, only that it wasn’t polluting their backyard.
    Hi Ogden–
    I don’t think ethanol is competitive at this point even with the corn subsidies.  The rush is on right now to figure a way to convert the cellulose in the corn stalks into ethanol instead of using the starch in the corn kernels.  If they can figure that out, so they say, ethanol will become extremely competitive.
    Thanks for the info on Denmark.  I’m unaware of what is happening there.
    Cheers–
    MRE 

  3. I wonder how attractive corn-based fuel is once you factor in the petroleum required for fuel and fertilizer to grow the corn and process it? I don’t have a copy of the book handy, but I seem to recall that in “The Omnivore’s Dilemma” Michael Pollan claimed it was a wash, i.e., that the amount of energy you got from some amount of corn was basically equivalent to the energy in the petroleum used to grow the corn and convert it to ethanol. I don’t know the answer, and Pollan has his own axes to grind so I’d take the whole idea with a grain of salt, but there is certainly some offset.
    If we weren’t growing all of this corn to fractionate and turn into junk food, or feed to cows, pigs, chickens, and salmon (!), maybe we wouldn’t need to find a use for all of the “waste” cellulose. Wasn’t corn oil originally a waste product of corn processing? Look at all of the wonderful benefits that brought to society.
    My (largely uninformed) opinion is that other technologies are more promising. I like the idea of growing algae in the desert for biofuel, or converting manure from dairy cattle to natural gas. What if we just plowed under the vast fields of corn and soybeans, allowed the natural prairie grass to grow, and grazed cattle on the whole thing? Prior to the arrival of the white man, this ecosystem was very efficient at supporting enormous herds of grazing animals. Grass-fed beef for $1.99/lb?
    Dave
    Hi Dave–
    The economics of corn-based fuel become much less attractive once the petroleum requirements are factored in.  Based on what I’ve read, it will be much less so when scientists figure out how to create enzymes that break down the cellulose in corn stalks.
    Count my vote for plowing under the corn and soybeans and converting the land to raising grass-fed animals.
    Cheers–
    MRE 

  4. The subject of hemp is also interesting in that regard. I won’t elaborate but here are some keywords if one chooses to look after it: hemp, Harry Anslinger, Jack Herer, Hemp for victory, the billion dollar crop, Dupont DeNemour, Nylon etc.
    Hi gallier2– 
    I’ve read a little about hemp, but not a lot.  Thanks for the key words.
    Cheers–
    MRE 

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