UN Data Shows That Ethanol is Not Causing Food Price Rises - on no, what to do with the superstition

[Bill USA]

.. that ethanol increases food prices (even though it decreases Oil prices by adding to the light transportation sector fuel supply!)



UN Data Shows That Ethanol is Not Causing Food Price Rises
(emphases my own)

TORONTO — The UN FAO has released data showing that global food prices have experienced the steepest monthly drop since 2008, casting doubt upon concerns about the impact of ethanol production in food price increases. The recent decline in food prices has coincided with a period of record ethanol production expansion, reaching a high of 94 billion litres in 2014 from 83.5 billion litres in 2012, a 10% increase over this period. This contrast clearly demonstrates that increased ethanol production has not driven up food prices.

The UN FAO Food Price Index averaged 155.7 points in August, down 5.2% from July, representing the steepest monthly drop since December 2008 with virtually all major food commodities registering marked dips. This drop coincides with a fall in crude oil prices in July of 19%, closing at $48.25USD per barrel on July 31.

The Global Renewable Fuels Alliance (GRFA) has for several years argued that the price of oil and energy inputs are the single most influential drivers of food and commodity prices. A number of international institutions including the World Bank, International Energy Agency (IEA) and United Nations Food and Agriculture Organization (UN FAO) have also recognised the strong relationship between oil prices and food prices.

A 2013 World Bank publication, Long-Term Drivers of Food Prices, concluded that almost two thirds of food price increases are caused by rising oil prices. The report states that between 1997-2012 the price of crude oil caused maize and wheat prices to increase by 52 percent and 64 percent, respectively. The report also found that biofuels had a negligible impact on food prices during this period.
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[Wellstone ruled]

1. Pretty much tells the story.

Corn for Ethanol is a special hybrid grown for wet corn processing. Higher Starch content. The Oil Companies as well as the Auto Industry were the basis of all the false info about Ethanol. For crying out loud,we used it during WWII to run our farm tractors. And Gramps made a few bucks on the side selling his special refresher to folks in the County.

[Bill USA]

2. the Oil companies have done a great job with the disinformation campaign. What's really 'funny' is

how totally snookered so many people, who consider themselves environmentalists, are. They parrot oil industry shill bullshit like it was written in 'those' stone tablets, we've heard tell of. LOL! (unfortunately, we're heading rapidly toward Global Warming's "Event Threshold".

Did not know about farmers using ethanol in tractors during WWII. Better watch out, Timothy Searchinger will come and "get you" for telling people about that!



Big Oil Buys Berkeley, California's Love Affair with Big Oil, Big Oil Goes to College:

http://www.democraticunderground.com/101688227

[Wellstone ruled]

3. Gramps had a little Brew House,

actually it was the pump house,and yes he came from a Brew mister family and the rest is History. His idea was if you can burn it,well the old Johnny Popper will run just fine and it did.

If you check the Ownership of some of these Ethanol Plants,well,you will see Names Like Koch Industries,Central Harvest States(Cenex) ,ADM/Partnership with Oil Majors. Once the Ethanol industry hit over capacity,many went Bankrupt and the Oil companies picked them up for pennies on the dollar. And the Tax Payer takes it in the shorts again. Planned build out to benefit the Majors and no one else.

[Bill USA]

4. except for Valero - not one of the 'majors'- oil co's only bought ethanol plants to close them down.

Oil industry is only interested in ethanol to the extent that they need it as an additive/octane booster to replace MTBE.

Complete list of ethanol plants with company ownership and links to each company


the 5 largest producers (below) together produce about 4.3% of all the ethanol produced. IOW it is not a concentrated industry.


http://farmindustrynews.com/ethanol/5-largest-ethanol-producers

ADM - This Decatur, Ill.-based grain and oilseed processor produces 1.75 billion gal./yr. It operates seven ethanol production plants. Visit www.adm.com.

Poet - Headquartered in Sioux Falls, S.D., Poet produces 1.6 billion gal./yr. at 27 production plants. Visit www.poet.com.

Valero Energy Corporation - This company produces 1.2 billion gal./yr. at 10 production plants. It is headquartered in San Antonio, Texas. Visit www.valero.com.

Green Plains Renewable Energy - Headquartered in Omaha, Neb., Green Plains produces 740 million gal./yr. at different production plants. Visit www.gpreinc.com.

Flint Hills Resources LP - This Wichita, Kan., company produces 440 million gal./yr. at four production plants. Visit www.fhr.com.

re: "Tax Payer takes it in the shorts again" the ethanol being sold over the last several years, say from 2009 onward has lowered gas prices estimated from a minimumof 10% to max of 30% (depends on estimator) which saved consumers, many billions of dollars per year (from about 2009 onward) in lower gas prices but also lower prices for everything which uses oil as a raw material, or incurs costs for transportation from raw material to suppliers to final products to retailers. IF you are referring to the Ethanol Excise tax credit to get ethanol up and running as an industry, the amount saved on lower prices of everything from gasoline to all the other products that paid less for oil as a raw material or an expense for transportation is many times greater than the excise tax credit (which ended as of Dec 31, 2011). Tax breaks for the oil industry are still going strong.

Historically, West Texas Intermediate Oil (called intermediate because it had less sulfer than Oil from around the world, for pricing purposes, called North Sea Brent) for decades sold at a premium to NSB from about 6% to 10-12% - on average about 8%. Then around 2005, when ethanol started being produced in significant volume the Price premium of WTI started shrinking. By mid 2011 the WTI price was as much as 22% BELOW North Sea Brent. (note that the uptick in domestic oil production didn't really get started until late 2011 and into 2012). By 2010 ethanol was reducing oil consumption to produce gasoline by about 10%. The price swing of WTI relative to NSB (before the domestic oil field production started increasing) was roughly 20% to 24% downward. Note that domestic ethanol production reduced demand for NOrth Sea Brent in the U.S. and so lowered NSB price too. Also, ethanol production was increasing all around the World and this contributed to North Sea Brent price going down too.


This of course, isn't even addressing the value of reduced GHG emissions from use of ethanol in cars and light trucks.