So, by now you have certainly noticed the price of gasoline continuing to climb. And you may have even noticed that a few things are a bit more expensive in the grocery store. Well you are not the only one to have noticed that things are about to get out of hand.
In a nutshell, what the World Bank (and others) are noticing is that the price of oil has a wee little something to do with the price of food, in on way that is obvious to most people and one that might not be so obvious.
The obvious reason (that might not at first be so obvious) is that nothing you eat is grown or made here. See any banana trees outside your windows? Your tomato plants all nice and healthy after the snow squalls yesterday? Turns out that the average morsel of food on your plate has traveled some 1500 miles to get there. And that is the overall average for the whole country, so I am going to guess that us northerners may have it a bit worse. So, transportation costs alone will add a bit, perhaps quite a bit to your food bill. But that is not the biggest impact that transporation will have on your food budget.
Your car also is very hungry and has to be fed.
In searching for renewable energy sources we hit upon the idea of using ethanol in the place of gasoline. Which sounds fantastic. Ethanol comes from plants and plants are solar energy, right? Also, ethanol was sold to us as a boon for the farmers of America. “Fill-er-up” and save the family farm. Or something like that. Turns out that almost none of that is exactly true.
It is true that ethanol is usually made from corn and that in a sense corn is a renewable resource. Unfortunately, the way most corn is grown, it uses up tons of non-renewable resources. Those conflakes of yours are soaked in oil — not corn oil, the crude kind.
Turns out that the high price of oil is squeezing the price of food on two fronts.
First, modern agriculture requires literally tons and tons of oil. From making fertilizers to running water pumps to trucking the stuff all over the globe, agriculture consumes huge quantities of fossil fuels. The higher the price of oil, the higher the price of food. But wait there’s more!
Now as more corn is diverted from the food chain into the ethanol plants, the price of food goes higher still! Land that could have been used to say, grow broccoli (OK, more likely wheat) is given over to corn — corn which no one will ever eat. Did you just hear the price of eggs going up again? Less corn on the market means more expensive chicken feed. More expensive eggs that cost more to ship than ever. Thank goodness ethanol is such a good deal and is saving the family farm!
Sorry, wrong on both counts.
Ethanol is not a good deal by most calculations. In fact it is a terrible deal.
The most optimistic number I have seen says that for each barrel of oil needed to make and transport ethanol we get about 1.3 barrels of energy (to compare apples to apples). For crude oil currently each barrel invested in finding, extracting and transporting yields something like 20 to 200 barrels of energy. So, ethanol has a long way to go, or oil has a long way to fall.
And ethanol does not really save any family farms. As you may have already figured, ethanol favors the kind of huge, monocropped factory farm that degrades the land and generates huge profits (and subsidies) for companies like Cargill and Archer Daniels Midland.
The only way out of the coming food crisis is to use less fossil fuels, both in agriculture and transporation. But fortunately there is a way to start doing that. Which we will talk about next time.