There are many factors working to drive these precious commodities through the roof: a weak dollar, the significant demand for them in many nations, poor yields for some producers, and so on. It is indeed a complicated mix of conditions. However, there is one clear culprit driving food commodities, and the irony is almost too much to bear: Anthropogenic (man-made) Global Warming.
The anthropogenic global warming craze has led many governments to rush to biofuels such as ethanol as a part of the “solution.” So now we have extreme food prices all over the world, the price of oil is still going nowhere but up, and recently the United Nations predicted “massacres” unless the current biofuel policy is halted. (Here’s another thick slice of irony: the UN has been one of the chief cheerleaders of anthropogenic global warming.) This is what happens when there is a rush to “solve” something that perhaps doesn’t even exist.
According to the UK’s Telegraph, “The mass diversion of the North American grain harvest into ethanol plants for fuel is reaching its political and moral limits.” A recent story on Yahoo news revealed that, “UN Special Rapporteur for the Right to Food, Jean Ziegler, told German radio … that the production of biofuels is ‘a crime against humanity’ because of its impact on global food prices.”
The Telegraph also reported that world grain stocks are at a quarter-century low, also noting that, “America - the world's food superpower - will divert 18% of its grain output for ethanol this year.” This is up from 11% in 2002, and according to the U.S. Department of Agriculture, during the next decade, unless there are policy changes, about 33% of U.S. corn will be used for fuel.
According to Bloomberg, corn is up 20% since mid-December and has doubled in price in the last two years. In late January, Richard Bond, CEO of Tyson Foods, the largest U.S. meat company, said, “ethanol has caused a domino effect. For the foreseeable future, consumers will pay more and more for food.”
That “domino effect” is many-pronged. Corn prices are tied to other grain prices. The more earth that is tilled for corn, the less there is available for wheat, etc. The net result is tighter supplies for the othergrains, and therefore increased prices for them as well. Also, much of the American diet contains corn and corn by-products, such as corn syrup. Almost all of these products are seeing significant price increases. Last, the increase in corn prices has resulted in price increases for animal feed, which has made everything from milk to beef to pork to chicken more expensive.
Republican and Democratic politicians alike, including President Bush, are to share in the blame for where our current ethanol policy is taking us. The energy act of 2007, which massively increased ethanol subsidies, was passed by a Democrat led Congress and signed by President Bush.
There seems to be a role for biofuels as a source of energy, but a smarter, more conservative approach is necessary. Other biofuels, such as biodiesel and cellulosic ethanol (made from plant waste matter), are proving more efficient, cleaner, and cheaper than corn ethanol.
Furthermore, there is no need to abandon oil as an energy source. Some recent research is showing that many biofuels are no “cleaner” than oil. Also, in 2006 Reuters reported that, according to a prominent energy consultant group, “World oil production will not begin to fall for at least another 24 years, contrary to doomsday theories that supply is already in terminal decline… the world has some 3.74 trillion barrels of oil left -- enough to last 122 years at current consumption rates and triple the amount estimated by ‘peak oil’ theorists.”
In his book Earth in the Balance, Al Gore, referring to the internal combustion engine, said, “their cumulative impact on the global environment is posing a mortal threat to the security of every nation that is more deadly than that of any military enemy we are ever again likely to confront.” It seems to me that this quote more aptly applies to the radical environmentalism that Gore and his disciples are preaching.