Chicken wings, South Park and ethanol

cartmanAs an avid “South Park” watcher, I can’t help but find irony in recent articles that blame ethanol for a host of problems, including a chicken wing shortage just before the Super Bowl. In the movie, “SouthPark: Bigger, Longer and Uncut,” the Oscar-winning song “Blame Canada” accused our friendly neighbors to the north for seemingly anything and everything. This, of course, was to hide the shortcomings of the residents of South Park.

Articles like the one on the lack of chicken wings may be turning ethanol into the new “Canada,” making the replacement biofuel take the fall for oil’s destructive power over our country. However, closer inspection of the articles seems to present only a relatively loose connection to ethanol, a connection that may in fact only be a correlation, not causation.

One commonly repeated central point is that ethanol production from corn is driving up food costs. In the chicken wings story, higher corn prices were said to be making animal feed less affordable, hence farmers can’t afford to raise as many chickens. If that’s true about corn prices, shouldn’t farmers also be rallying against high oil prices? Surely the fourfold increase in oil and gasoline prices over the past 15 years must be making it difficult for them to afford animal feed.

crude-oil-un-food-price-indexFood prices tend to track oil prices, not ethanol prices (although ethanol prices may track oil prices as well). This chart by the International Monetary Fund shows just that. The main reason for this phenomenon is likely because food production and distribution require a lot of oil (fertilizer, tractors, shipping, etc. are all fueled by petroleum products). When oil prices go up, costs for farmers to plant and harvest their crops increase, fuel costs for shipping rise and more.

Have we all just become so resigned to high oil prices that we’ve become blind to its inflationary pressure? Are we so used to overpaying for gasoline that we’ve come to accept it as an unavoidable fact of life? Is this apathy and complacency causing us to look for other culprits to blame?

High oil prices affect every part of our economy. Beyond contributing to rising food costs, our dependency on oil balloons our trade deficit, stunts GDP growth thus preventing job creation, squeezes family budgets, dirties our air and contributes to the onset of various diseases. Increased ethanol production may indeed be one of many factors correlated to corn price hikes (drought may be another one), but oil dependency contributes to rising corn prices and so much more.

Let’s not turn the tendency to blame ethanol into the new “Blame Canada.” As a nation, America must keep its focus on the $780 billion a year addiction that’s bankrupting us; we need to end oil dependency.