Livestock, biofuel, and the current food price hike

For much of the US, this summer has produced record heat and the worst drought in 50 years. This has severely diminished corn production, leading to a 23% rise in corn prices, a 17% rise in cereal prices, and a 6% rise in total food prices globally in July, according to FAO food indices. Elevated grain prices affect consumer prices and have the potential to exacerbate food insecurity in the world; for example, the food price hike back in 2007 and 2008 led to food riots and an increase in malnutrition for much of the world’s poor, who were forced to spend a significantly higher proportion of their limited income on food.

In the US, only a small proportion of corn is grown for direct human consumption. Around 80% is grown for livestock, both for US and foreign markets—and this equates to a large share of global corn production, as nearly half of the world’s corn is grown in the US (EPA). Of the corn that remains in the US, 43% goes to livestock, 44% to ethanol production, and the remaining 12% to food or other industrial applications (USDA ERS). Naturally, the competition between food, feed, and fuel is exacerbated in times like these when output is greatly diminished.

Recently, a coalition of beef, pork, chicken and dairy producers petitioned the EPA to suspend the mandate requiring that 13 billion gallons of corn-based ethanol be blended with fuel for transportation in the US each year. Even after the multi-billion dollar annual tax credit to ethanol producers expired at the end of 2011, this mandate has sustained high ethanol production by guaranteeing demand. The livestock coalition believes that this policy is wrong given that half of the US corn crop is currently classified as being in “poor condition.”

In a recent Financial Times article, the director-general of the FAO, José Graziano da Silva, chimed in on the debate, calling on the US to suspend the ethanol mandate for the upward pressure it has on global corn and wheat prices. Expanded ethanol production is considered to have been a factor in the food price hike a few years ago, though market speculation, climate change-related drought, and increasing food demand from emerging countries such as China (which is largely related to increased livestock production) also seem to have played a role.

Though the critiques of biofuel are valid, there is some irony in livestock producers pointing the finger at another industry for pushing up grain prices. Though biofuel does consume a large amount of US corn—and arable cropland in general—it comes nowhere near the amount of US corn that is grown for world livestock production. Cycling grain through animals is an inefficient way to produce calories; for example, feedlot cattle raised on grain require up to20 pounds of grain feed to produce a pound of meat.

If the US and the rest of the world are interested in long-term demand management of food crops such as corn to promote food security—for this is what removing the biofuel mandate equates to—then the broader issue of dedicating most agricultural land to feed crops for livestock animals (rather than growing crops to feed directly to humans) ought to be addressed in the context of public policy. World livestock production has harmful impacts not only in terms of consumer prices and food security, but also in terms of sustainability, water use, climate change, and animal welfare.

In a similar way that ethanol and other food crop biofuels do not offer a true solution to our energy needs, livestock does not offer a true solution to our food needs. Given that humans can derive all the necessary nutrients from plant-based sources—and since so many chronic health problems actually arise from diets high in meat, eggs, and dairy—there ought to be a rigorous public debate on the utility of dedicating so much of our arable land to livestock production.

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One thought on “Livestock, biofuel, and the current food price hike

  1. Your blog posts are incredible! I wish I was in NYC to participate in your reading group. I can’t wait to attend the conference!

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