Rise in Ethanol Raises Concerns About Corn as a Food
By Timothy Gardner
Renewing concerns about whether there will be enough corn to support the demand for both fuel and food, a new study has found that ethanol plants could use as much as half of Americas corn crop next year.
Dozens of new ethanol plants are being built by farmers and investors in a furious gold rush, spurred by a call last year from the Bush administration and politicians from farm states to produce more renewable fuels to curb Americas reliance on oil. But the new study by the Earth Policy Institute, an environmental group, found that the number of ethanol plants coming on line has been underreported by more than 25 percent by both the Agriculture Department and the Renewable Fuels Association, the ethanol industry's main lobbying group.
The Earth Policy Institute says that 79 ethanol plants are under construction, which would more than double ethanol production capacity to 11 billion gallons by 2008. Yet late last month, the Renewable Fuels Association said there were 62 plants under construction.
The lower tally has led to an underestimate of the grain that would be needed for ethanol, clouding the debate over the priorities of allocating corn for food and fuel, said Lester R. Brown, who has written more than a dozen books on environmental issues and is the president of the Earth Policy Institute. This unprecedented diversion of corn to fuel production will affect food prices everywhere, Mr. Brown said.
Bob Dinneen, the president of the Renewable Fuels Association, said the group had not intentionally tried to play down the number of plants under construction. It has been a moving target, Mr. Dinneen said in an interview on Thursday. We are not trying to hide the ball. We are trying to keep up with a growing and dynamic industry as best we can.
The Renewable Fuels Association has generally played down concerns in the food versus fuel debate over ethanol, saying that estimates showed there would be plenty of corn to meet the demand for both. We can absolutely do that without having a deleterious impact on consumer food prices, Mr. Dinneen said.
The National Corn Growers Association said Thursday that farmers were keeping up, noting that growers produced their third-largest crop in 2006 of 10.7 billion bushels. All demands for corn food, feed, fuel and exports are being met, Rick Tolman, chief executive of the corn growers, said in a statement. Farmers have always responded to price signals from the marketplace and, historically, we have had much more challenge with overproduction than shortage.
With spot prices of corn soaring to record highs of nearly $4 a bushel last month, farmers are expected to plant some 85 million acres of corn this year, an increase of 8 percent over 2006 and what would be the largest corn-seeding in the country since 1985, said Dan Basse, president of AgResource, an agricultural research company in Chicago.