One Stiff Bird: Ethanol Drives Expensive Turkey
We’ve all read that biofuels are driving up the price of [insert food here], from coffee to beer to meat — even gummy bears, for heaven’s sake. Now that it’s gobble day, of course we have to blame ethanol for higher-priced turkeys. CNBC says Thanksgiving dinner will cost $5 more this year due to ethanol bumping up the price of corn (turkey feed), which accounts for 60 percent of the cost of the bird. The article quotes the head of California’s Poultry Federation, who says he knows of a large operation that has witnessed its corn feed bill jump by $100 million. Chew on that!
What a bunch of lobbyist desinformation. Aren’t we noticing that all the feed-fuel arguments are coming from the meat-packer monopolies (there are only four major players here)???
Fact is that 70% of corn goes into feed (cattle), 10% in to food and 20% into ethanol. That said, most of the cost of corn-fed meat is NOT what the farmer gets and therefore the turkey or cow eats, most goes into transportation and marketing (i.e. the meat packer that has no problem raising prices to keep his margin). Further, even the corn needs fertilizer, transportation, and farming – ALL that to the tune of OIL prices that jumped 30% from last year. Fertilizer is made from oil, transportation (grain, meat) uses diesel from oil and farming as well, tractors don’t drive without oil. In sum : it is OIL that is pushing the prices up, not the $0.10 of corn that are contained in the $3-$4 box of corn flakes.
But it certainly makes a great argument for the meat packers…
In Brazil we have no problem with food prices, because Ethanol is created with cane sugar
@Rodrigo – Very interesting point. Ethanol from sugar cane has been a huge success in Brazil, but we don’t feel the benefits in the US. Why? We have massive tariffs against importation of Brazilian ethanol. Yet, our glut of corn-based ethanol makes our Thanksgiving meals more expensive.
That’s domestic policy under the Bush administration. Bad for America, bad for the world.
This is all very interesting. Last year as oil was already on the rise, I invested in a home heating furnace that burns “shelled” corn. This grain is the same stuff used for or processed into ethanol, animal feed, etc. I was concerned about future corn price increases, so I asked the farmer who I got the corn from. He said, yes, prices will go up for corn because of the ethanol hype, but not because it’s taking away from the food supply. He said that a lot of the feed that animal are fed is actually the byproduct of ethanol (or other product) production. The spent mash, when dried, is packaged and used as animal feed. So, if this is the case (and please correct me if I’m wrong as I’m not a farmer or ethanol producer) then why is the cost of animal feed (and hence the turkey) price going up? It seems that prices of oil, ethanol, and other commodities are NOT created from a supply/demand scenario, but rather a stock-market speculation of commodities traders.
What Rodrigo fails to mention is the simple fact that ethanol from cane sugar is almost eight times more efficient than ethanol from corn. The Brazilians have consistently made better choices in this area than the U.S. has done. P.S. Brazil has recently disclosed large new oil discoveries.
Butanol, not ethanol, makes more sense for the U.S. market because, unlike ethanol, it can be distributed via pipelines, is not corrosive and can be used in existing automobiles without modification. The additional bonus is that every gallon of Butanol contains 92% to 94% of the energy of a gallon of gasoline instead of the meager 70% that ethanol contains. Oh, butanol has a very slightly higher octane rating than ethanol as well. Butanol requires a different production process, but can be produced from any source that ethanol can use.