John R. Lott, Jr.: Ethanol Mandates Cause Rising Food Prices

Discussion in 'General Discussion' started by Don Buckbee, May 1, 2008.

  1. Don Buckbee

    Don Buckbee New Member

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    http://www.foxnews.com/story/0,2933,352968,00.html

    John R. Lott, Jr.: Ethanol Mandates Cause Rising Food Prices
    Monday, April 28, 2008

    By John R. Lott, Jr.



    Food prices are rising worldwide. Some nations, such as Egypt and Cameroon, are facing riots as the prices for basic food stuffs rise. Other countries from India to Cambodia have banned food exports to try and keep prices low and reduce voter anger.

    In the U.S., the Wall Street Journal last week gave advice normally associated with survivalists warning about the end of civilization. Readers were warned to start hoarding non-perishables ("Dried pasta, rice, cereals, and cans of everything from tuna fish to fruit and vegetables").

    But in case anyone missed the seriousness of the message, the Journal went so far as to give the extra advice that: "You should also save money by buying them in bulk."

    Not all food prices are soaring, however. Food and beverages as a group aren’t rising much faster than overall inflation. Inflation over the last year was slightly under 4 percent, with food and beverages at 4.4 percent.

    But while some food prices have gone down (e.g., oranges and lettuce), others have gone up much faster, particularly grains and the meat from livestock fed on grains. Over the last year, eggs have gone up 35 percent, chicken 10 percent, beef 8 percent, white bread 16 percent.

    Corn has experienced the most phenomenal rise. Corn, which averaged around $2 a bushel from 2002 to 2006, rose to over $4 per bushel in 2007 and is now over $6 per bushel.

    This rise in food prices is primarily due to government ethanol mandates, particularly last year’s Energy Independence and Security Act. In 2006, 25 percent of all the corn used in the U.S. went to producing ethanol. This year the share rises to about 34 percent, and by 2014 the mandates are expected to raise the share to 53 percent.

    The U.S. has long been a major exporter of grains, but the quantity going to ethanol are enormous. We are expected this year to convert 3.53 billion bushels of corn into ethanol. There are about 280 medium length ears of corn in a bushel. To put it differently, just the corn used to produce ethanol this year could provide 104 million people with 2,000 calories every day for a year.

    Not that anyone would want to live on a diet of corn, but it gives an idea of how much hunger could be ended if the corn were used differently. While corn is the main source of ethanol in the U.S., other crops from sugar cane to wheat straw to rice are also being used to produce ethanol. Higher prices surely encourages more corn to be planted, but it means less of other crops, such as soybeans and wheat, driving up their prices.

    People are beginning to understand this.

    On Friday, Texas Governor Rick Perry became the first governor to ask the federal government to waive half the mandate that ethanol be made from grain.

    The irony is how much worse off ethanol is making us in other ways. In recent years, without the subsidies and the mandates, there would have been little if any demand for ethanol. Besides a 51 cent per gallon tax credit, there are other incentives for farmers and small ethanol producers, all together totaling about $1 per gallon.

    Ethanol also produces much less energy than gasoline. A car that gets 30 miles per gallon on gas would get only 20 miles per gallon on ethanol. Without the subsidies and the mandates, ethanol would have to be less than two thirds the price of gas before it would pay for people to use it.

    Some have claimed that the price of corn has soared because gasoline is more expensive, but it is very hard to see much of relationship between changes in retail gas and corn prices. Retail gas prices average close to $3 a gallon in July and August 2006, but corn prices were still only about $2.50 per bushel. At the same time last summer, gas prices ranged from $2.70 to $2.80 per gallon and corn prices were well over $3 per bushel.

    Environmental regulations are bad enough when they simply do nothing more than waste Americans’ money. But we live in a world economy and using massive amounts of corn and grain to make ethanol means that poor people from Africa to Bangladesh have less to eat.

    John Lott is the author of Freedomnomics and a senior research scientist at the University of Maryland.
  2. Marlin

    Marlin *TFF Admin Staff Chief Counselor*

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    I wonder what will happen if all these nuts finally realize that for the past sveral years the earth has actually been

    C O O L I N G

    ?????????????

    I think we have to guard against so-called global warming really being - -

    GLOBAL GOVERNANCE..... :( :( :( :(
  3. obxned

    obxned New Member

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    ...and still our government wants more ethanol production and use. What planet are these drolling idiots from.
  4. OldPilgrim

    OldPilgrim New Member

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    It's interesting that we have 10% ethenol added to our gas here in the NE and we get 10% LESS gas mileage because of it. That makes a lot of sense doesn't it.

    The gov't mandates something that does you and me and the environment NO GOOD AT ALL. The oil companies sell the same amount of gas, we pay for gas and ethenol and the gov't has created an ethanol industry.
  5. CampingJosh

    CampingJosh Well-Known Member

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    If anybody has the February 2008 issue of Popular Mechanics magazine, page 56 cites the research of Cornell University professor David Pimentel. He estimated that it takes about 1.3 gallons of oil to produce a gallon of ethanol.
    Does this seem to anyone else like perhaps we'er not coming out ahead?
  6. artabr

    artabr New Member

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    I posted this on another forum.
    http://healthandenergy.com/ethanol.htm

    Art
  7. 300 H&H

    300 H&H Active Member

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    The amount of corn used for ethanol is not even 25% of what we grow. Isn't it amazing what lies the oil companies spout through their suragates, ( Is John lott -Trent Lotts brother? and if so do you know what Trent Lott did in the Senate and why?) and if told often enough they become true. I think everyone who cares had better do their own reasearch on this one as the powers that be are pulling the wool over your eyes. I guess the way you all sound the United Arab Emmerence has not got a thing to worrry about. Please just remember, with enough money you can get "experts" to say what you want. Best reguards Kirk
  8. obxned

    obxned New Member

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    I guess facts, figures, and physics don't impress everyone. For those not yet convinced of the senselessness of ethanol fuel from corn, let's just remember:

    It is morally wrong to put ethanol into a fuel tank while good oak barrels are available!
  9. 300 H&H

    300 H&H Active Member

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    Artabar,
    Mr David Pimetel's piece you have referred us to is at best rubbish He states a yeild of corn/acer as 125bu. This is 25 bushels below the national average. He then states that is requires 140 gal of fuel per/acer to produce the corn. Let's think about that. So, on 1000/acers of corn he suggests it would take 140,000 gal of fuel. Now take this number times his costs per gallon of $3.47 ( I paid $2.93/gal in 08) and WOW that would cost $485,800:eek: Just to raise a 1000/acer corn crop. ( you could buy 100acers for that!) Does this sound like a bit much to you? My actual cost last year on 2000 acers was $36,000. So I take what Mr. Pietel's piece wit no reguard what so ever. It's just such a bold-faced lie. By the way who funded his reasearch? There in might be a clue. Maybe Exon/Mobile? Best reguars Krik
  10. CampingJosh

    CampingJosh Well-Known Member

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    Raising the corn isn't the only cost of producing ethanol--it takes more gas than simply driving your tractor.
  11. 300 H&H

    300 H&H Active Member

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    Josh,

    So true. The prices I quoted are to get the crop into storage. Add another dime/bushel and you get it to martket, or in this case the ethanol plant. The price he quoted was 13 times as much. He stated that it took this much energy to just this point, to the market..... And then he goes on with more apparently errored cost of conversion to ethanol. With this much error, a factor of 13, on the first of his steps to a total, with the key ingredient. Well lets just say his final results will reflect that.... Best reguards Kirk
  12. CampingJosh

    CampingJosh Well-Known Member

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    Kirk,
    I had previously read only the PM short summary... I didn't realize that Pimetel claimed 140 gallons per acre for production...
    He should probably have a decent mechanic look at his tractor, because he's not getting nearly the fuel economy he should.
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