Will the High Price of Oil Make Americans Skinnier?
by Lloyd Alter, Toronto on 01.11.07
We enjoyed Steven Levitt and Stephen Dubner's book Freakonomics; they used their economists training to look at social issues in a different way. We also like thier blog, where they do this regularly. They suggest that the ethanol craze, which has raised the price of corn by 60% since last summer, will drive producers of sweet stuff away from high fructose corn syrup toward other sweeteners. According to some researchers, "The body processes the fructose in high fructose corn syrup differently than it does old-fashioned cane or beet sugar, which in turn alters the way metabolic-regulating hormones function. The end result is that our bodies are essentially tricked into wanting to eat more and at the same time, we are storing more fat." They posit: "So, as higher oil prices continue to drive demand for corn-based ethanol, which drives the price of corn higher, which makes cheap corn syrup more expensive, which leads food manufacturers to seek out potentially less fattening sweeteners, will Americans get skinnier?" ::Freakonomics
Coincidentally, on the same day the blog Environmental Economics said:
In ECON 101 we'd say, an increase in the demand for corn increases the price of corn. Since corn is an input into the production of the corn chip (I hope), the price of corn chips will rise. This might lead to an increase in the price of potato chips (a substitute for corn chips) and a decrease in the price of salsa (a complement of corn chips). The price of beer might fall if beer consumers require a salty snack to go along with a bottle of cold refreshment. Or, maybe that's the tail wagging the dog? ::Environmental Economics
Or, people will crave it and continue to buy it, but in it's most concentrated forms: cola drinks for example.
Also, the by-product of fermentation is a dried mast that can either be blended into animal food supplements or burned to support distillation. If the mast becomes over-supplied, animal feed prices will lower, etc.
I made a similar argument (albeit in a more sarcastic way) in my blog several months back:
Fat People Use More Gas
High-fructose corn syrup makes people fat, fat people need bigger cars, bigger cars use more fuel, more fuel is ethanol based, less high-fructose corn syrup due to ethanol diversion makes people thinner, they switch to smaller cars, less ethanol is used... the cycle continues.
Two thirds of the industrial corn harvest goes to feeding factory farm animals. So higher corn prices should jack up the cost of meat, which should translate into people eating less fatty foods.
People will just eat lower quality food which will make them larger. So if everyone was feeling the pinch the US weight could explode leading to everyone getting larger cars and trucks. The circle of life.
I'm wondering if Stevia will become more popular as a sweetener in industrial food production. It's a perennial herb in the warmer parts of the world, and a relatively productive annual in the colder places, like New England. So it could be raised as a local crop pretty much anywhere at least on some scale. It doesn't offer the bulk of most common sugars, but is far healthier and can be used by diabetics too. The main problem is that if you use too much of the stuff (it's something like 20 times sweeter than cane sugar) there is an odd aftertaste, so it's a little tricky to use. But it's going to be a lot cheaper than corn sugars, and far more efficient a crop for the amount of sweetness.