Commentary

A Hungry World Population? Oh Well, Let Them Eat Ethanol!

…Here come the corn riots.

Climate change policies—much more than the vagaries of climate–are now beginning to create the instabilities that cooler heads have been warning about for years.

Corn prices on the Chicago Board of Trade are now at or near record levels, around $8.30 per bushel for spot delivery. The rise in recent weeks has been dramatic, driven by the perception of declining yields caused by hot and dry conditions mainly in the upper Midwest.

Much of this corn is beyond redemption as grain. High temperatures render corn’s pollen sterile, and the narrow pollination season—usually around ten days in a given field—dictates that once this time has passed, there’s likely to be very few kernels set on each ear. While rain may allow the plant to recover, its value as feed is dramatically reduced.

The U.S. corn growing region is massive in extent, so that some residual yields are always preserved. The drought of the mid-1950s was a widespread and multi-year event, but it only reduced yields (the amount produced per acre) around 20%. The current drought is comparable in extent, but not in magnitude nor in duration. Yet.

What we have seen is a change in policy, not of the weather.”

Back then, the average yield was around 45 bushels per acre (a bushel is 56 pounds of shelled corn), and rising at a pretty constant rate that began with the large-scale adoption of hybrid corn, which began in the 1930s.

Despite the wailings of Paul Ehrlich and his tiresome compatriots, there were no great famines because of some fantasy “limits to growth” that were forecast to soon to be breached. Instead, corn yields continued their steady climb. A good year now yields around 160 bushels. Between then and now, there have been several bad years caused by drought, heat, and blights, and pretty much every one of them has seen the same percentage toll on yields, about 25 % of the maximum expected value at the time.

The Department of Agriculture’s July 11 projection is for a 9% reduction from that nominal 160. But it’s been pretty hot and dry since that estimate was made (with data from many days before 7/11), so things are going to drop further, which is why corn prices continue to climb.

Which brings us to ethanol. It comes from corn. The amount to be produced is a mandate, not a choice. It’s 13.2 billion gallons this year. Last year we burnt up 40% of our crop. This year, given the expected yield reductions, we could easily destroy over half of our corn.

The U.S. is by far the world’s largest producer, and our abundant supply is a major factor in keeping the price of the world’s most abundant feed and food grain low—generally around $3.00/bushel. That was before George W. Bush decided that the answer to global warming was to produce ethanol from corn. Hence the rise in corn price that commences with the 2007 passage of the ethanol mandates, followed soon by global food riots. $8.00 corn today will likely bring much more of the same.

Bad weather is a fact of life in agriculture. In the last four decades, the time of maximum and increasing carbon dioxide concentrations, there’s no evidence of an increase in the number of bad crop-years, nor a change in the magnitude of the percent drop in yields that occurs. 2012 is shaping up like a garden-variety crummy year.

What we have seen is a change in policy, not of the weather. Now, the Saudi Arabia of corn burns up half of its supply, instead of selling it to a hungry world. All of this was brought to you by our greener friends and, yes, Republicans, working the political process hand in hand. Later, the environmental community realized—as some of us had been telling them for years—that corn ethanol results in an increase in carbon dioxide emissions, not a decrease.

Of course, there is little chance that the disproportionately influential farm lobby is going to swallow changing the ethanol mandate when its constituents are making money hand-over-fist because of an artificially induced shortage. It’s also an election year. But, isn’t it just too bad about those poor people in Mexico and around the world who actually will suffer for the insanity and depravity of our agricultural/environmental policy?

Patrick J. Michaels is a Senior Fellow in Environmental Studies at the Cato Institute.