Food vs. fuel. It’s an argument you’ve likely heard before, and you’re likely to hear again. People in the world are still going hungry, so we shouldn’t be using crops to make fuel. The corn grown in the United States should be going into the bellies of starving children, not our gas tanks. It makes perfect sense — until you look closer.
For starters, more than 99 percent of corn grown in the United States is not meant for human consumption. No, that’s not a typo. Good old corn on the cob — that delicious barbecue side dish — is what is known as “sweet corn,” and makes up less than 1 percent of corn grown in the U.S. The rest is a strain of corn called “field corn.” Field corn is hard, dry, and only suitable for consumption by animals. After it goes through a distillation process, it’s fit for consumption by automobiles.
But wait, you say, maybe you’re not taking food out of the mouths of people, but what about the animals!? Well, as it turns out, a co-product of ethanol production is a kind of animal feed known as distillers grains. So even when field corn is used to make ethanol, it’s still feeding animals. Which, in turn, become people food.
So no, ethanol isn’t taking food away from people or animals. However, another (false) food vs. fuel argument is that biofuels like ethanol artificially raise the price of corn, indirectly hurting people and animals. Here again we have an argument that seems like it should make sense on its face but which falls apart when you actually take a look at the evidence.
Since the Renewable Fuel Standard (RFS) was instituted in in 2007, ethanol production increased from 6,521 million gallons to 14,340 million gallons in 2014. So, by the logic of the food vs. fuel argument, the price of corn should be climbing consistently, and by now should be much higher than what it was in 2007.
Yet that’s not what we’re seeing. Ethanol production is at the highest it’s ever been in the United States, yet when you adjust for inflation, the price of corn is at one of its lowest historical levels (see chart).
And there you have it. No matter how you look at the equation, ethanol production isn’t taking food away from people or animals, nor is it raising food prices. The traditional food vs. fuel argument doesn’t stand up to scrutiny.
But that doesn’t mean food and fuel have no relationship. According to an analysis from the World Bank, the number one driver of food prices around the globe is the price of crude oil, accounting for almost two-thirds of changes in food prices. When oil prices go up, the cost of planting, harvesting and transporting crops naturally goes up.
So the next time you hear the food vs. fuel argument, remember; Ethanol isn’t taking food out of the mouth of babies. But oil sure does.