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 2.8 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 40 million metric tons of animal food was produced by ethanol plants in 2015, making the renewable fuels sector one of the largest animal feed processing segments in the U.S.
More grain is available for food and feed use worldwide today than at any time in history. Farmers harvested a corn crop of 13.6 billion bushels in 2015 – the third-largest ever only behind 2014’s record crop and 2013. What’s more, global grain supplies and ending stocks were projected to hit all-time highs in 2015/16, and just 2.9% of that record supply is expected to be used for U.S. ethanol production – a six-year low.
Meanwhile, food price inflation continued its downward trend, and consumers are spending a smaller portion of their income on food today than before.
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 processing, transportation, labor, packaging, advertising and other costs.
In 2016, researchers from the U.S. Department of Energy, World Bank, IFPRI and other notable organizations released a report that found that a majority of previous reports claiming a “food vs. fuel” linkage looked at too short of a timeframe and used “questionable and subjective” underlying assumptions. Looking closely at the period of rapid biofuels expansion in the U.S. and Brazil, and specifically the global food/commodities price spike in 2007–2008, the authors found evidence of negative impacts on food prices due to oil prices, economic growth, currency exchange rates, trade policies and speculation—but not biofuels. The authors also note the continued growth in global biofuel consumption over the longer term has had no correlation to cereal grain prices, which instead have been driven by oil prices, national agricultural policies and exchange rates. The findings reflect what the U.S. ethanol industry has been contending for some time—there is no correlation between the growth of biofuels and food insecurity. You can view the report here: “Reconciling Food Security and Bioenergy: Priorities for Action.”