This fall, Congress will consider an aggressive ethanol production mandate that spells bad news for pork producers in the Tar Heel State.
Ethanol, an alcohol distilled from plants that can be used to run cars, has become a policy priority in developed countries because its combustion emits less greenhouse gas than gasoline, which appeals to politicians eager to fight global warming. In the <?xml:namespace prefix = st1 ns = “urn:schemas-microsoft-com:office:smarttags” />United States it is made from corn; in Europe, ethanol is distilled from oil seeds.
Now Congress is considering mandating the production of 15 billion gallons of corn-based ethanol. That's a lot of corn. It takes about 21 pounds of corn to make one gallon of ethanol. The mandate, if enacted, would take 5.5 billion bushels of corn off the market to make fuel-about 40 percent of all corn grown in America this year.
The repercussions on the corn market would be enormous. By driving up demand for corn, Congress would also drive up its price. In fact, it's already happening. In 2005, Congress mandated that 7.5 billion gallons of ethanol be incorporated into the nation's fuel supply. As a result, the price of corn has increased by almost 70 percent in only two years. Imagine what a mandate for double the amount of ethanol would do.
That's bad news for pork producers. The average pig reared in the United States consumes more than 500 pounds of corn and corn feed accounts for 65 percent of all pork production costs. As a whole, the pork industry uses about a billion bushels of corn annually.
An expanded ethanol mandate would further increase the cost of feed. As feed becomes more expensive, so do pork products-and higher prices, in turn, lower demand for pork products. According to an Iowa State University study, Congress's plan to expand ethanol production would decrease pork production nationwide by 4 percent.
A contraction in the pork market would have dire consequences for North Carolina, the nation's second largest producer of that other white meat. Pork production contributes more than $2 billion dollars to the state's economy annually, and employs more than 46,000 people. If the market shrinks, these figures shrink too; pork farms would lose customers, and people would lose jobs.
And for what? The combustion of fuel made out of corn might emit fewer greenhouse gases than gasoline, but the production of ethanol requires a lot of energy. It takes a lot of gasoline to run the big machines that harvest crops and process fuel. This is only to say that the production of ethanol has a carbon footprint-a big one. A recent study in the scholarly journal Science demonstrated that the manufacture of ethanol creates two to nine times the greenhouse gases that its use saves.
For North Carolina, and the nation, a mandate to expand ethanol production is all pain and no gain.