November 9th 2008
It´s not true when someone says that corn-based ethanol will not affect prices of food. Let´s take a look at the boom on the Mexican tortillas prices on the occasion of the first North American corn crop for ethanol. The raw material for the tortillas, corn meal, is imported from the USA. So we understand that food price increases are more devastating for the world's poorest consumers.
We already know the environment benefits that ethanol brings if compared to gasoline. But the American culture is far from understanding, at least in this generation, how to avoid or eliminate the need for high horse-powered engines running on gasoline. There is a bunch of new ethanol-powered cars, but it is the government's obligation to make strong publicity and marketing to convince the population to use renewable energy.
The thing is that the USA is not able to expand its corn area without decreasing the soybean fields. So if that really occurs, we will have a collapse in soybean prices, less soybean grain could affect the prices of meal and protein livestock feeders buy, making it hard for the poor population to have access to meat. Perhaps, if they invest in technology, and that’s what American agriculture is pioneering on, they could increase corn production instead of planting in new fields. They are investing on plant breeding to increase the corn oil production and selecting hybrids that have higher productivity. But anyone that has a little knowledge on grain production knows that is not only about the breeding, it´s about the management and mainly the use of fertilizers. In order to have a good production, instead of expanding the corn field area, they will need to invest in the use of more fertilizers. Therefore, the fertilizer is the highest item in cost percentage in grain crops; increasing production in the USA will be expensive.
Brazil has a big potential on making biofuels. And it is on sugar cane based ethanol that we could become the biggest ethanol exporter. We know that there has been a great deal of interest by ihe USA on Brazil´s ethanol production. But if they import a nice amount of our ethanol, they could affect their ethanol plant and put all investments at risk, as they would not need new ethanol plants. Every country wants to be independent on energy, because of the crude oil crisis. Brazil has an abundance of land and diversified production. We don’t need to deforest anymore, because we have a big potential in the Cerrado area, where the new fields of sugar cane are being cropped. So, Brazil could export sugar cane ethanol without affecting the food prices, but if The USA cut corn subsidies for ethanol, we could have stable food prices for corn and all of its subproducts.
It´s not true when someone says that corn-based ethanol will not affect prices of food. Let´s take a look at the boom on the Mexican tortillas prices on the occasion of the first North American corn crop for ethanol. The raw material for the tortillas, corn meal, is imported from the USA. So we understand that food price increases are more devastating for the world's poorest consumers.
We already know the environment benefits that ethanol brings if compared to gasoline. But the American culture is far from understanding, at least in this generation, how to avoid or eliminate the need for high horse-powered engines running on gasoline. There is a bunch of new ethanol-powered cars, but it is the government's obligation to make strong publicity and marketing to convince the population to use renewable energy.
The thing is that the USA is not able to expand its corn area without decreasing the soybean fields. So if that really occurs, we will have a collapse in soybean prices, less soybean grain could affect the prices of meal and protein livestock feeders buy, making it hard for the poor population to have access to meat. Perhaps, if they invest in technology, and that’s what American agriculture is pioneering on, they could increase corn production instead of planting in new fields. They are investing on plant breeding to increase the corn oil production and selecting hybrids that have higher productivity. But anyone that has a little knowledge on grain production knows that is not only about the breeding, it´s about the management and mainly the use of fertilizers. In order to have a good production, instead of expanding the corn field area, they will need to invest in the use of more fertilizers. Therefore, the fertilizer is the highest item in cost percentage in grain crops; increasing production in the USA will be expensive.
Brazil has a big potential on making biofuels. And it is on sugar cane based ethanol that we could become the biggest ethanol exporter. We know that there has been a great deal of interest by ihe USA on Brazil´s ethanol production. But if they import a nice amount of our ethanol, they could affect their ethanol plant and put all investments at risk, as they would not need new ethanol plants. Every country wants to be independent on energy, because of the crude oil crisis. Brazil has an abundance of land and diversified production. We don’t need to deforest anymore, because we have a big potential in the Cerrado area, where the new fields of sugar cane are being cropped. So, Brazil could export sugar cane ethanol without affecting the food prices, but if The USA cut corn subsidies for ethanol, we could have stable food prices for corn and all of its subproducts.
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