Fueling and Feeding the World:
Ethanol is both feeding and fueling the world. One bushel of corn produces approximately 16.5 pounds of animal feed and 2.85 gallons of ethanol. Ethanol is made from field corn, not sweet corn that humans consume.
Ethanol biorefineries only use the starch in the corn to make ethanol. The protein, fat and fiber in the corn returns to the livestock feed market as distillers grains or other co-products. Distillers grains are fed to beef cattle, dairy cattle, swine, poultry, sheep and fish.
More than 42 million metric tons of animal food was produced by ethanol plants in 2016, making the renewable fuels sector one of the largest segments of the U.S. global feed market.
More grain is available for food and feed use worldwide today than at any time in history. Farmers harvested a record corn crop of 15.1 billion bushels and achieved a new record average yield of 174.6 bushels per acre in 2016. The unprecedented corn harvest erased any lingering notions that growers can’t supply enough grain to meet both ethanol demand and growing global demand for food and feed.
While grain consumption by the ethanol industry hit a record level in 2016, U.S. retail grocery prices experienced deflation for the first time since 1967. The U.N. world food price index hit a seven-year low as global grain and meat supplies hit all-time highs. The prevalence of worldwide undernourishment fell to its lowest level since the U.N. began keeping records more than 25 years ago.
Just as ethanol demand isn’t the only driver of corn prices, the cost of corn and other feed commodities isn’t the only driver of retail food prices. In fact, only 17 cents of every dollar spent on food pays for the raw farm ingredients in the food item. The other 83 cents pay for energy, processing, transportation, labor, packaging, advertising and other costs. In fact, a recent World Bank report concluded that “most of the contribution to food price changes from 1997-2004 to 2005-2012 comes from the price of oil.”