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Feed the Hummer; forget the hunger

Thursday, April 5, 2007

The ethanol boom launched U.S. corn prices to a ten-year high of $4.38 per bushel this past March. As gas tanks gobble up more of our nation’s corn supply, rising commodity prices may result in sinking profits for livestock producers. Hog farmer and director of purchasing for Iowa Select Farms Joe Kerns says that feed costs have risen by about forty percent.

Beer drinkers will also suffer from pricier pints. As the market value of corn increases, farmers have begun to cut barley acreage in favor of larger corn tracts. Feedlot operators have responded to higher corn prices by purchasing a higher percentage of grain, thus putting additional pressure on malt prices. As a result, beer producers across the United States expect to charge more for their beverages—a reflection of significant increases in raw materials costs.

But perhaps the most disturbing consequence of the ethanol boom will occur in the developing world. According to a new report featured in Foreign Affairs, increased agricultural commodity prices from U.S. ethanol consumption will exacerbate global hunger. The International Food Policy Research Institute predicts that with all else equal, U.S. bio-fuel demand will push an additional 600 million of the world's poor into chronic hunger by 2025.

To put things in perspective, a 25-gallon SUV tank filled with pure ethanol uses over 450 pounds of corn. This amount of corn would meet the entire caloric needs of one person for an entire year.

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