Food and Fuel
From time to time there’s talk that corn-based ethanol is akin to taking a food crop (corn) to produce a fuel (ethanol). This argument is false on several fronts – in fact, it was dreamed up by food manufacturers and Big Oil as part of a PR campaign to smear the most successful renewable fuel in history.
Why? Because they felt ethanol may hurt their bottom line.
The truth is, there is plenty of corn produced each year to meet all demands: food, feed, fiber and fuel.
There’s plenty of corn because farmers are more productive every year. In other words, the amount of corn produced per acre (yields) continue to rise. In fact, corn production was rising faster than demand for many years. This led to stagnant demand, corn prices below a realistic level and little incentive to invest in new technology.
Ethanol production helped change that by taking a percent of the crop and converting it to fuel. Farmers were growing more corn so we just as well put it to use! But corn used in ethanol production is field corn – not sweet corn like we eat on the cob, canned or frozen. Sweet corn makes up less than 1 percent of the entire corn crop.
While ethanol producers use field corn, they still only use the starch portion of the kernel – the rest of the kernel is returned as a concentrated protein feed for livestock. In fact, this co-product of ethanol production, known as distillers grains, is highly sought after by livestock producers, particularly cattle producers.
Cattle grow well when distillers grains is included in the diet, and distillers grains often lowers the feed bill.
The bottom line is, for each bushel of corn used to produce ethanol, both fuel and feed are returned. That’s an incredibly efficient way to add value – twice! – to a commodity like corn.
While ethanol production continues to grow, corn yields will, too. In fact, some experts believe corn yields in a decade may be 40 percent larger than today – and 80 percent larger by 2030. This gives us a great opportunity to take advantage of corn – a crop adapted to grow incredibly well in Nebraska and across the country.
Want more information on the primary types of corn grown in Nebraska, click here.
Curious about the value of corn in food products?
We were, too! That’s why we took a look to see the value of corn (or, in some cases the value of corn used to make a food ingredient) if corn is priced at $6.00 per bushel (about 10.7 cents/pound).
We refer to this as Kernels of Truth because a couple of years ago, some folks were stretching the truth on the impact of corn prices on food — and some truth stretchers are still trying even though the World Bank and Congressional Budget Office have both said ethanol’s role in food prices is minor.
Here’s what we found out: