Competitive Enterprise Institute | 1899 L ST NW Floor 12, Washington, DC 20036 | Phone: 202-331-1010 | Fax: 202-331-0640
From Dennis Avery’s introduction:
My 2006 CEI Issue Analysis, “Biofuels, Food, or Wildlife? The Massive Land Costs of U.S. Ethanol,” concluded that the United States did not have enough cropland to make a significant dent in its transport fuel demand without risking radically higher food prices, while suffering a massive loss of forests and grasslands to expanded corn production.
Yet even I have been astounded at the swift onset of food shortages and high crop prices which have ensued since. According to the World Bank, global food prices have increased by an average of 83 percent over the 36 months to April 2008, during which time the United States diverted ever increasing amounts of corn into ethanol. At the same time, European nations were increasingly diverting rapeseed and imported palm oil into biodiesel, and the Canadian province of Saskatchewan was building plants to ferment more than 1.4 million tons of wheat per year into wheat ethanol.
The World Bank’s analysis shows that, from 2004 to 2007, global corn production increased by 51 million tons, biofuel use in the U.S. increased by 50 million tons, and global consumption for all other uses increased by 33 million tons—causing global stocks to decline by 30 million tons. In other words, biofuels have made the world use more corn than it can sustainably produce, creating massive food price hikes.