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Charges and Changing – Helping Feed and Fuel the World

March 25, 2011


This week, the chairman of Nestlé, Peter Brabeck-Letmathe, attacked ethanol as an "immoral" policy.  It is a charge backed by lots of emotion, but very little fact.  If moral behavior is the goal, then an open, honest exchange of facts is in order.   If the goal is helping starving countries, then it would be more useful to have acknowledged that just as Nestlé is trying to help farmers around the world by using local suppliers and education, the ethanol industry is creating jobs and markets not only for American family farmers but corn farmers throughout the world. Here are the facts without emotion or misplaced sanctimony.
  • There are different types of corn.  Sweet corn is consumed by humans and not used in the production of ethanol.  Field corn is used to feed livestock as well as produce ethanol.
  • One third of every bushel of corn used in the production of ethanol is returned to the market in the form of high nutrient livestock feed – dried distillers grains, corn gluten meal, and corn gluten feed.
  • The majority of corn exports from the United States are used to feed livestock in developed countries like those in Europe and Asia, not third world food supplies as some would like to claim.  It should also be noted that parts of the world like Middle East, Asia and Africa have diets more dependent upon wheat and rice, than corn.
  • In 2010, U.S. farmers had the third largest crop and fourth-highest average yield in history.  The 2010 crop was the fourth time and fourth consecutive year in which more than 12 billion bushels were produced – produced on virtually the same amount of acres as used in the 1970's.  Ample corn for food, feed and fuel.
  • The U.S. ethanol industry will use just 3 percent of the global grain supply on a net basis.
  • The USDA recently reported that just 11.6 cents of every dollar spent on food makes its way back to the farm.  It could be argued that corn's share of the food dollar is just 1.7 percent.  According to the USDA, after labor costs are subtracted energy-intensive sectors are the second largest contributor to food price.  This means nearly 33 percent of a food dollar goes to such energy intensive areas as processing, packaging, and transportation.
  • There is approximately seven cents worth of corn in a box of Corn Flakes.
  • A March 2010 report by the United Kingdom's Department for Environment, Food and Rural Affairs found that "Available evidence suggests that biofuels had a relatively small contribution to the 2008 spike in agricultural commodity prices."
  • The World Bank, which in 2008 suggested biofuels were playing a large role in higher food prices, released an analysis in July 2010 that found "...the effect of biofuels on food prices has not been as large as originally thought..." and that "...the use of commodities by financial investors may have been partly responsible for the 2007-08 spike."