There’s an energy conflict brewing, and it’s not based in the Middle East. The food vs. fuel debate is heating up in America’s heartland, as the federal government pushes for increased ethanol production and the food industry foresees increased food prices as a result.
In the Renewable Fuel Standard of the Energy Policy Act of 2005, Congress mandated that renewable fuel use in gasoline reach 7.5 billion gallons by 2012. And, in his Jan. 2007 State of the Union address, President Bush called for “setting a mandatory fuels standard to require 35 billion gallons of renewable and alternative fuels in 2017,” an almost five-fold increase of the current goal.
Adding ethanol, produced largely from corn, to gasoline helps decrease cost, increases the fuel’s octane rating and decreases harmful emissions. Continued, increased use of ethanol-gasoline blends also reduces U.S. dependence on foreign energy sources. Certainly, increased demand for corn is a boon to farmers.
But the food industry foresees problems. Shortly after the president’s address, the National Chicken Council (NCC), Washington, D.C., warned that the increased use of renewable and alternative fuels could, by extension, raise the cost of poultry.
“We estimate that ethanol demand has already increased the price of chicken by $0.06 per pound wholesale,” says William P. Roenigk, senior vice president and chief economist, NCC. “If government continues to push corn out of livestock and poultry feed and into the energy supply, the cost of producing food will only increase. While we applaud the administration’s support for the development of alternative fuels, the fact remains that corn is the most-popular feedstock for ethanol, and increasing the demand for ethanol will put additional pressure on the cost of both corn and food.”
Likewise, Tyson Foods, Inc., Springdale, AR, warned that boosting ethanol production would spill over into higher global food prices. “If left unaddressed, the bigger long-term issue will be the availability of U.S. and global grain for protein and other foods,” says Dick Bond, president and chief executive, Tyson Foods. “We fully support efforts toward renewable energy; however, as the food-vs.-fuel debate unfolds, we must carefully consider the negative and unintended consequences of overusing grains.”
In a panel presentation at the March 2007 USDA Ag Outlook Conference, two leaders in the industry expressed thoughts on the future of food and fuel. Patricia A. Woertz, chairman and CEO, ADM, Decatur, IL, stated: “As we envision the future for bioenergy, we see it spurring extraordinary innovation, the kind of innovation that leads to significant improvements in product quality, in cost to consumers, and in the quality of life.
“The development of new technologies, combined with yield improvements, point to the opportunity to produce more food and more fuel—and not just in this country, but throughout the world. We believe that is a future well worth pursuing and well worth adapting to short term bumps that may be experienced along the way.”
At the same conference, Gregory R. Page, president and COO, Cargill, Inc., Minneapolis, offered the following: “As a developed society we will have the capability to produce both food and renewable fuel, but what will be the cost to those who can least afford it? As a responsible society, we need careful thinking and planning as we navigate new ground and continue to face the challenge of providing food to an ever-expanding world population.
“In promoting biofuels, policymakers must face this challenge head-on,” Page continued. “We all must consider the impact biofuels promotion will have on food and feed supply chains, and on choices around land and crop use. As competitive pressures build over the use of land for food, feed and fuel, the costs of all three will rise.”