Is ethanol production really driving up tortilla prices in Mexico?

Question

I've heard that increasing use of ethanol, which is made from corn, is driving up corn prices, which is driving up the prices of staple foods like tortillas in Mexico and other countries. Is this true? Are the economics of ethanol really sound?

Answer 1

Yes, it is true. You should think of ethanol in the following terms: First, corn is absolutely the worst thing in the world to make ethanol out of. It takes almost as much energy in the form of tractor fuel, nitrogen fertilizer (produced from petroleum and shipped using diesel) and electricity as you get out of the finished product. You can't pump it through pipelines because it corrodes seals, so you have to ship it via truck or rail, making the equation worse. On top of that, a vehicle gets worse mileage on ethanol then it does on gasoline, so whatever marginal energy gain there might be disappears. Second, every food item you consume is made from or made using corn. I challenge you to find a single processed food item that doesn't include High Fructose Corn Syrup in the ingredient list. What about meat? Beef? Corn fed. Chicken? You guessed it. Fish? Just as soon as the corn lobby figures out how to raise a catfish on corn. The US produces more corn then any nation on the planet, so if we put our corn into gas tanks instead of using it for food, it drives up the price of corn worldwide along with anything made with corn. If you take nothing else away from this, remember these two statistics:
1) If the entire US grain crop (corn, wheat, everything) were converted to fuel, it would only displace 16% of our gasoline use.
2) The amount of grain it would take to fill a 20 gallon tank with corn ethanol would feed one adult human for a full year.

Answer 2

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Answer 3

Yeah, ethanol is made from corn. The production of ethanol increases the demand for corn. And as we all should have learned in economics class...as demand goes up....price goes up. So the price of everything made from corn goes up. The price of corn products may eventually start going down though. Farmers are planting a lot more corn this year. And scientists are working on creating processes to produce ethanol from plant stalks and different types of grasses that would help keep the production of ethanol from affecting food prices.

And yes, even with it making corn prices go up, the economics are sound. It is helping corn farmers which make very little money. Some farmer families have to figure out how to live off about 10-12,000 dollars a year of income her in the US. That is poverty level. I look at it this way. It helps our poor farmer families out and it hurts the big oil companies. So to pay a few more cents for taco shells or corn flakes to do both of those is definitely worth it.

What the other person failed to mention is that you are only going to be using a portion of the corn to make ethanol. You are going to have leftover and byproducts that can still be used for other things. So even though they say a gallon or two could feed a person for a year. A good portion of that corn that is used to make that gallon can still be used after it is used to make ethanol.

Saying that the production of corn will use up enough corn to really hurt things is ridiculous. That's like saying using hog fat to may fuel would use up the entire hog. The fat is just part of the hog. Every part of the pig is used: the ribs for bacon, the shoulders and hindquarters for ham, even the ears for dog chew toys. The same goes with ethanol production. Only a portion gets used for the production of ethanol.

Answer 4

When I was in Mexico recently, the newspapers were full of stories about the cost of tortillas. Some of those stories linked the use of corn for ethanol to the price increases. While there is some evidence that this may be true, there was also some dicsussion about yellow versus white corn -- white corn is used for tamales in Mexico while yellow corn is used to manufacture ethanol in the US. So it isn't black and white.

There were also issues about free trade agreements like NAFTA which had caused dislocations in commodity prices in Mexico.

The unfortunate truth about all of this is that ethanol from corn is a pretty illogical and expensive way to save energy. Not only is it likely to drive up corn prices generally (so you can pay more for both fuel and food), but it is quite inefficient at saving energy given the large amount of energy it takes to produce enthanol from corn (think of farmers planting corn using fuel burning tractors and harvesting equipment, the cost to ship seeds, the cost to ship the corn produced, the cost to transform the corn into ethanol, the fact that ethanol has less energy per gallon than gasoline so that it gets fewer miles per gallon than gasoline, the fact that it is caustic and can't be shipped by pipeline, that it costs more per gallon than gasoline -- the list goes on).

In fact, some pretty knowledgeable people estimate that ethanol consumes almost as much energy as it produces, maybe we get 5 to 10% more energy from ethanol after deducting the energy its production consumes.

From an environmental and economic perspective, it would probably make much more sense and save more energy to require all automobiles to get a miniumum of 25 MPG. We could save much more petroleum than we are likely to ever get from ethanol production.

Answer 5

Yes, ethanol production is driving up tortilla (and other corn product) prices. However, this doesn't mean that ethanol is unsound economically. Corn-based ethanol has disadvantages like this, but cellulosic ethanol will be a significant improvement.

Cellulosic ethanol is ethanol fuel produced from cellulose, a naturally occuring complex carbohydrate polymer commonly found in plant cell walls. Cellulosic ethanol is chemically identical to ethanol from other sources, such as corn or sugar, and is available in a great diversity of biomass including waste from urban, agricultural, and forestry sources. However, it differs in that it requires an extra processing step called cellulolysis – breaking cellulose down into sugars. It can be made from various plant sources and creates less greenhouse gas emissions than corn-based ethanol.

It's not a complete solution to global warming, but ethanol should be part of the solution, and it can be economically viable.

Answer 6

I think that in my lifetime I will see a power struggle for power. If oil is to be replaced slowly with alternative fuels, then vast acreage must be dedicated to its production and large acreage will be taken out of food production. The cost of food will go up. It will become a moral issue of feeding people or feeding the greed of corporations. I'm afraid that the corporations will win in the short run and poverty will increase. There is already a 3rd world reality in every city in the world, even the west. The difference between the rich and the poor is increasing...its all about greed. Somehow we all need to be more responsible in the products we use and we need to have some control over major corporations...they pay no direct taxes, we pay them for them when we buy the products

Answer 7

yes, it's true, it is simple supply and demand economics. Due to the growing demand of corn for ethanol production, the supply is more scarce than it was, therefore driving up corn prices.

This is one of the difficulties with biofuels in addition to the need for huge land space to grow the crops to produce biofuels. Then there are problems due to insects and other pests whose populations grow exponentially in huge one-crop areas, then you need more pesticides, which messes with our water supply.

For the new European Commission goal of using a certain percentage of biofuels by 2020, they would need to plant crops on an area the size of Italy.

Therefore, let's put more focus on designing good electric cars that can be fueled with photovoltaic (PV) systems. PV systems are much cleaner, need almost no maintenance, and the space on which PV systems can be installed (big green field applications) can still be used by livestock and farmers.

Answer 8

He's right, ya know, about that evil substance called corn syrup being in everything. Got the answer to that right here:

STOP BUYING PRODUCTS WITH CORN SYRUP!

This sweetener somehow took over the majority of making foods taste good. What happened to cane and beets, the original sugar boom? Europe was so facinated by sugar cane that they took over the New World just to get it cheap. There are reports out that mention people losing 25-50 pounds in a year just by cutting soda drinks out of their diet. Ya know what sweetens a Pepsi? CORN SYRUP! So not buying soda and juices made with syrup puts a decline in the syrup market AND in our waistlines.

Still have a sweet tooth? Introducing Stevia, a plant I came across in my herbal studies. Stevia, related to sunflowers and asters, is 300 times sweeter than sugar. So you use WAY less in your foods, meaning WAY less calories (and cavities) and the taste lasts longer too. It's not approved by the FDA yet, 'cuz to them it's just an herb, but what is sugar cane if not an herb? An herb, as defined by Webster, is any plant not developing a lasting woody tissue. So how to make the markets use stevia extracts instead of sugar or that evil, vile syrup? Hmm...now there's food for thought.

Ok, so various corn products will jump in price. We'll adapt, we always do. I myself buy FLOUR tortillas. And corn flakes? Well, they're nasty anyway, and so's the milk to wash 'em down. Lots of our cereal is made with corn, but if we ate things like fruit and toast for breakfast...see? More adaptation. That's all it takes. The entire situation can be adjusted with a little knowledge and a bit of change.

And the meat that was mentioned? Yeah, I like my meat, I'm part carnivore, but I can live on hamburger and nuggets. I don't need steak, don't even like it much. My favorite snack? Not candy or potato chips (one sweetened with corn syrup, the other fried in corn oil, yes some brands use corn oil rather than sunflower)...I like a nice bowl of frozen veggies, steamed to perfection.

There's also an irritating thing in the books of our government that most of us are starting to forget. Even I don't know all the ins-and-outs of it. Probably started in the Depression or Dust Bowl years. The government PAYS FARMERS NOT TO PLANT FIELDS! Had to do with "too many planted fields made too much supply which drove the price of corn down which made it difficult for farmers to survive." Sounds like a SOLUTION now, not a PROBLEM! Reverse this statute, plant those fields, pay the farmers to plant if you have to (but if they didn't practice one crop farming...basically putting all their eggs in one basket...) and the price of corn will go down, the supply of corn will go up, combine more corn grown and less made into syrup, and we'll have plenty for ethanol. When the cellulosis technology that I'm just now hearing about becomes well studied and efficient, we can wean off of corn ethanol just like we're trying to wean off of gasoline now.

Answer 9

Yes, it's true... and it's not just in Mexico... have you look at the price of a box of Corn Flakes, recently?

Answer 10

No! That is pretty gullible:)! That is not true, and basically all of the USA's used corn (Obviously for Ethanol E85), is from our Midwest.
Thanks!