Food and Fuel America.com: Corn Growers: Food and Fuel Report Released

Thursday, August 2, 2007

Corn Growers: Food and Fuel Report Released

The National Corn Growers Association has released a new report, "US Corn Growers: Producing Food and Fuel (PDF)" which helps to highlight how corn growers' ability to meet the demands of the food and fuel markets.

Some highlights from the report:

The Ethanol Process Creates Feed and Food Ingredients
Ethanol isn’t the only product created by the fuel alcohol fermentation process. Every 56-pound bushel of corn used in the dry grind ethanol process yields 18 pounds of distillers grains, a good source of energy and protein for livestock and poultry. Similarly, a bushel of corn in the wet mill ethanol process creates 13.5 pounds of corn gluten feed and 2.6 pounds of high protein corn gluten meal, as well as corn oil used in food processing. The ethanol process removes only starch—not fat or protein—from the feed and food market. The starch portion of the kernel is converted to ethanol, while the protein, fat and other nutrients, vitamins and minerals are passed through to the feed coproducts or human food ingredients. Protein, which is left intact by the ethanol process, is a highly valued product in world food and feed markets. Conversely, starch is abundantly available and lower in value. Aside from preserving the protein, a considerable portion of the corn’s original digestible energy is also preserved in the distillers grains.

Record Demand for Corn is Being Met with Record Supplies
Demand for corn is at an all-time high, due in large part to the rapid increase in corn-based ethanol production.

Corn Demand for Food and Feed is Plateauing
Because other corn demand categories show signs of only limited future growth, it is expected that most of the additional supply resulting from expanded acreage and higher yields will be available for biofuels production.

Ethanol is Produced from Field Corn, Not Sweet Corn
Some purveyors of the “food versus fuel” argument seem to forget that ethanol is made from field corn, a grain that is undigestible by humans in its raw form. Unlike sweet corn, field corn requires some form of processing before it can be consumed by humans. Moreover, very little field corn is actually used for human food ingredient processing. As an example, just 1.5 percent of the 2006/07 crop was used for cereals, while other human food uses accounted for roughly 9 percent of total corn use. The overwhelming majority of U.S. corn, including exports, feeds livestock—not humans.

And finally:

“The consumers should complain to The Organization of the Petroleum Exporting Countries (OPEC) and not to the farmer if they’re unhappy with food prices. The U.S. regularly encounters food inflation even when corn and soybean prices are low or falling. Retailers and food processors typically put an extra markup on top of any increase in commodity prices.”
—Michael Swanson, Wells Fargo agricultural economist

Source: National Corn Growers Association