If you havenâ€™t heard yet, fuel prices are expected to rise in the coming months, and stay high through the summer. The price of oil is on a continual rise, and when oil rises, so does the cost of fuel. What you donâ€™t think about is how this will affect your cost of food.
Every stage of food production requires energy of some kind. It can be in the form of fuel, electricity or feed for the animals. In todayâ€™s every changing â€œgoing greenâ€ environment, when the price of fuel goes up, so does the demand for ethanol.
Ethanol happens to be made from one of the staples of livestock production: field corn. Corn is used largely in hog, poultry and grain finished beef diets because of the high-energy content.
According to David Pimental, a Cornell University agricultural expert, â€œ70 percent of corn grain is fed to livestock and poultry in the United States.â€ When ethanol demand goes up, so does the price of corn, which increases the price for producers.
Now I know there are many advocates out there for grass-fed beef, which would eliminate the need for corn for this meat product. While I agree this is an alternative, I do not think it would be possible for the U.S. to produce enough beef to meet demand, and to meet demand at the price that consumers want. That is a topic for another day.
If that is not enough, according to agriculture.com, â€œend-of-season corn supplies are projected at a 15-year low.â€ This low will cause even more of a jump in corn prices.
As of Wednesday on the Chicago Board of Trade, March corn was currently trading at $6.59/bushel, while similar corn last June traded for as low of $3.43/bushel. That means in roughly 6 months, the price of corn has doubled.
If that doesnâ€™t scare you, it should. When looking at the New York Stock Exchange history, the price of oil right now is $89.11/barrel, as of last week. If you will remember, oil reached an all-time high in July of 2008 at $145/barrel. Almost 2 years ago, oil was at a low price of $36.51.
This increase is going to affect the areas of agricultural that use fuel. Many times, producers take this extra cost, and the consumer doesnâ€™t see the affects. However, if these issues are as longstanding as predicted, consumers will have to pay the cost.
It seems like it would be easy to just increase the amount of land used for corn production, but as agricultural land is shrinking, it will become more important to keep crops diversified.
If more corn is planted, other crops like wheat and soybeans will experience a dip and other foods such as bread will increase. It is a never-ending vicious cycle.
Pimental also said, â€œif all the automobiles in the United States were fueled with 100 percent ethanol, a total of about 97 percent of U.S. land area would be needed to grow the corn feedstock. Corn would cover nearly the total land area of the United States.â€
If that doesnâ€™t show the issues we face, Iâ€™m not sure what does. So what does the future of food look like? There is no doubt consumers will have to pay more. According to a New York Times article from October of 2010, â€œthe federal government forecasts that food prices will rise as much as 1.5 percent this year and 2 to 3 percent next year. The average annual increase in food prices over the last 10 years was 2.9 percent.â€
This issue isnâ€™t over, and the recession isnâ€™t over either. Be prepared, but also be thankful we have a constant food supply here and wonâ€™t experience the food prices that will be seen in other parts of the world.
Robyn Scherer is a graduate student studying integrated resource management. Her column appears Frindays in the Collegian. Letters and feedabck can be sent to firstname.lastname@example.org