Corn Prices: Now It's Getting Serious
by Lloyd Alter, Toronto on 07.16.07
And we thought movie popcorn was so expensive because the theater owners hosed us and sold us a bag worth three cents and a pop worth five cents for nine bucks because they could. Now we find out that the poor guys are crying in their Coke because ethanol is driving up corn prices. "I've never seen something quite like this," said American Pop Corn [maker of Jolly Time] president Garrett Smith, who's been in the business for three decades. He had to pay farmers almost 70 per cent more this spring than last year to grow his popcorn and has had to boost prices for movie theatre popcorn and jars of unpopped corn.
Mr. Smith is being walloped by higher soy prices as well, the second-biggest ingredient the company uses. Those prices have been rising too as farmers switch into corn crops. "It's a double whammy," he says. "It's a tough thing if you're trying to buy an alternative crop like we are." ::Globe and Mail
UPDATE: It's hitting our ice cream too!
From the Times Online:
What’s the connection between ethanol, the biofuel produced from corn, and a cherry vanilla ice-cream?
Answer: the first is responsible for pushing up the price of the other.
This month, the price of milk in the United States surged to a near-record in part because of the increasing costs of feeding a dairy herd. The corn feed used to feed cattle has almost doubled in price in a year as demand has grown for the grain to produce ethanol.
Christina Seid, whose family have been making ice-cream at the Chinatown Ice Cream Factory for 28 years, said yesterday that she expected to have to raise her prices, along with all competitors in the short term. “We are holding out as long as we can, but prices will rise,” Ms Seid said. ::Times Online
Thirsty for more? Check out these related articles:
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- $5 Billion in Corn Ethanol Subsidies Should Be Eliminated, Food Before Fuel Urges
- World’s Largest Ethanol Producer, Verasun Energy Corp, Files for Bankruptcy
- Cambodia’s First Ethanol Plant Will Use One-Fifth of Nation's Cassava Crop
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In my opinion biofuel is a red herring.
It is only popular because of an agricultural lobby.
Biofuels are a very inefficient way to harnest solar energy.
The real future is in electrical cars, with the electricity coming from wind and solar energy.
Betcha that corn wasn't organic either.
Fueling with ethanol is the same as burning topsoil.
pieter,
Excellent point. I have long considered biofuels as an option simply because they are renewable in an immediate sense (if not truly sustainable). But, I think now I've totally reconsidered. Given the energy conversion efficiency of plants
Also, places like the desert southwest could convert their near-useless irrigated fields into solar installations, leaving productive midwestern farmland to grow food.
Has the corn used for ethanol really causes such market constraints that the food prices have to jump up so much? Or is it an example of market manipulation that we already see with oil prices?
Currently farmers are paid to not produce crops in order to artificially inflate prices. One would think that that is no longer necessary if prices are going up so the government wouldn't need to restrict supply. With supplies no longer being restricted demand should be met easily especially since our country was already producing a surplus.
Perhaps a huge increase is caused by middlemen who restrict supply by buying crops from numerous farms and simply raising the price to their customers because they can and use ethanol as an excuse. That's what the oil companies do, I don't see why Archer Daniels doesn't do the same.
What is happening to the price of corn syrup? I'd love to see the price of all the sweetened junk food increase as a result of biofuel usage.
All the whining about feeding cows just makes me laugh. Why don't we just let them roam around and eat grass, instead of corn?
Question for which I don't have all the answers:
Why does it get reported over and over again that feed prices rise with the production of ethanol? Doesn't anyone know how ethanol is made? The by-products (technically speaking they're co-products, since they're useful) of ethanol production are distillers grains and corn gluten.
Perhaps there are reasons why these co-products are insufficient as a replacement for corn prior to the fermentation of the ethanol, but with the increased production of ethanol FEED PRICES SHOULD FALL on these feeds. The only thing I know about the difference between DG and soy meal is that DG has less lysine. I can't find any other nutrition difference. And I don't think anyone cares what the livestock thinks.
That being said, cows should be eating grass in the first place, and in the second place, people probably shouldn't be eating cows. But the main point of this post is why people think ethanol is affecting price for livestock feed when ethanol production actually creates livestock feed.
I would love an explanation from someone who knows. I just think there's a huge backlash against biofuels in the environmental movement being paid for by the oil industry without the environmentalists realizing it.
PopCorn =/= Seed corn that ethanol consumes.
"ice-cream at the Chinatown Ice Cream Factory"
That's funny! 70-90% of all asians are lactose intolerant, i.e. their digestive tracts finished developing to adulthood and cannot digest baby food any longer.
pieter: I totally agree with you. How many thousands of years has it been since we "discovered fire?" It's time to move on beyond the age of burning stuff into the age of harnessing energy in constructive ways. We've been using electricity for quite some time and still haven't progressed beyond combustion.
It's time to move forward as a species: crops are food, wind and sun are energy, wood and stone are shelter. It works. hopefully soon so will we.
It does not matter if bio-fuel is a red-herring. It is an opportunity for a new person to get rich, or a rich person to expand and get richer. Only rules can stop the madness but these days, laws are only made FOR big business so it won't happen.
Why is the price of corn going up at movie theatres?
Last I checked Movie Popcorn prices were EXTREMELY overinflated. Approximately by 2500% of the actual cost. For example, you can buy enough kernels in some stores to make popcorn for about 20 people. That bag of kernels costs less than 1 bag of movie popcorn.
Even if the price of corn doubled, or even tripled, the price of Movie Popcorn, Corn Syrup, etc, should not even be affected because the price of corn is already so low!!!
This is a scam by someone, I don't know who, but they are just trying to use demand to inflate prices to values above what they should with fake demand combined with slightly above average demand.
This negative side effect of ethanol based biofuels was well documented and publicized amoungst national leaders and the scientific and agrocultural communities well over a year ago.
Europe's early adoption of biofuels spiked grain prices within one (1) growing season!
YAY! raise the price of corn syrup, raise the price of milk!
maybe food will revert to actual cane sugar if corn is too expensive. maybe people will consume less milk/cheese/meat.
i was not so into corn derived ethanol until about 2 minutes ago. don't get me wrong, i love my grilled corn on the cob, but i can handle paying a little more than $2.00 for 8 ears at Whole Foods.
now that increase in the price of soy is the REAL concern. yipes!
if they would just take the land that cows are ruining and dedicate some to feeding people (and cars)... everything would work out.
so, everyone's complaining cause farmers are actually seeing some benefits to this, they've been getting the same price for corn for 50 years, while inflation has pushed everything else up , quite your complaining people
they've been getting the same price for corn for 50 years, while inflation has pushed everything else up , quite your complaining people
That's not even remotely believable on its face.
In reality, the producer price index for farm products has gone up 244% over the past 50 years.
Biofuels are a questionable source of energy, but ethanol isn't going anywhere right away. That leaves many better ways of producing ethanol than corn though! Brazilian cane is than 3-8 times more efficient, at the cost of the rainforest, more promising is future developments of pulp wood based ethanol, though that would come with its own fallout.
More serious to me than the implications of expensive movie treats is the alarming rise in corn prices in Latin America, which has long been receiving cheap corn from the united states and no longer produces enough to feed itself. The doubling or tripling of tortilla flour prices in central america could lead to malnutrition/starvation fallout for years to come.
Nathan
High prices for corn will encourage the planting of increased acreage which will have the eventual effect of reducing prices.
The demand for corn which fuels increased prices is artificial since it is the result of government mandates. In an uncoerced market, petroleum-based fuels would out-compete biofuels for some time to come.
Hard-core environmentalists will oppose any energy scheme which contributes to maintaining an advanced technological civilization, whether it's biofuels, wind generators or hydro-electric dams.
I am surprised that ethanol would be made from popcorn. I grew up on a farm in Iowa where we grew field corn and soybeans. Iowa gas stations have sold gasoline with a mixture of 10% ethanol from field corn as an alternative next to the regular gas-only pumps for at least 20 years. I remember a few years back when the United States government was actually paying farmers to not grow corn and leave fields empty because farmers were too efficient in producing corn and there was a glut of corn on the market which drove down corn prices. So I don't understand why using some of that excess supply of field corn to fuel automobiles would suddenly drive up food prices. That doesn't make any sense to me.
Hard-core environmentalists will oppose any energy scheme which contributes to maintaining an advanced technological civilization
Go away, troll.
I have a grandparent who is a farmer. They are not driving up any prices. The seed price has been driven up so the farmers are still screwed in the end. They are not getting rich in this deal. They still have to work hard and not get anything.
Don't forget about our dead zones!
WA Post had an article yesterday on the impact of increased corn production on the hypoxic area in the Chesapeake Bay, and down here in the Gulf we're sweating bullets that the Dead Zone we've been battling (about the size of New Jersey every summer) will explode. Increased corn means increased fertilizer and pesticides in our waterways.
Ethanol is simply ADM/Cargill shouldering Exxon/Shell aside. The environment still loses.
The only way to get corn ethanol to work today is a ~$0.51/gal subsity. Take a look at Bio-Butanol, it's a way better fuel but it's too expensive without help from the Govt. Corn ethanol will NEVER free us from oil, can't be trasported in existing pipelines, attracts water, and has a lower energy content compared to other Bio-Fuels.
Hey! Now maybe they can stop poisoning animals by feeding them the cheapest thing on the market - corn!
Then they won't have to pump them full of antibiotics and other chemicals to keep them alive!
Then our milk and beef won't have remnants of all that crap and we'll all be healthier!
ethanol is not good yeah cheaper better for the enviroment but it is affecting food prices, grain prices and the some farmers are suffering from it they didn't think about everyone when the came up with it
Farmers are the hardest working citizens in the United States; we should all appreciate their work and be thankful for the products they produce. The middle man is the one that gouges the consumer in the end not the farmer. If you understand anything about economics the farmer is a price taker, they cannot control the price they get paid for their products they are at the markets mercy. Why are there no farmers making comments on this site???? They are too busy working themselves to death to fool with this kind of BS discussion. I grew up on a farm and have never worked so hard for so little money as I did there. Support the farmers and never criticize without first understanding the situation.
It's not biofuel that's driving the cost... If anything it's lowering the cost. Check the prices of transportation of their products and you will see a direct correlation between the prices of transporting goods to market and the price of the end-product. I can only assume that he may be having a hard time getting a farmer to grow his popcorn because the farmer knows he can make better money by growing biofuel friendly crops. Just make sure you're informed before you go trashing a cleaner-alternative fuel
Wow, in reading these post I never realized how many truly uninformed people full of half truths and empty headed comments are really out there! "Killing cows with corn" whats up with that? Last time I checked, corn keeps cows from getting thin trying to produce enough milk to make the ice cream and the thousands of other dairy products we depend on. If we stopped feeding corn and the cattle all ended up looking like a rack of bones, the next thing would be the PETA people camped at our door taking pictures of the poor neglected cattle. I have devoted the last 23 years of my life to dairy nutrition, consulting farmers on how to feed for healthy productive cattle. Instead of taking your vacation to Florida to lie around on the beach for 5 day's I think you should stop in at a Wisconsin farm and see what it takes to make an honest living.
Another good place to stop and visit is an ethanol plant. You could see them tapped into the natural gas pipeline sucking in fossil fuel. You could see their deep wells sucking in millions of gallons of ground water. You could see the semi loads of urea and other chemicals being used to get the starch out of corn and convert it to ethanol. You could see the massive amounts of electricity used. You could see that there is barely a net energy gain vs. fossil energy consumed to make your so called "green" fuel. The only thing green about ethanol is the government subsidies they get to keep operating!! And were does that money come from? Yea, our taxes. Green fuel alright, green backs!
Washington has known about this problem for years... Is it not time that our goverment got off it's butt. They have been warned of global warming. Why does everything got to get to criises before anything is taken serious. I am 67 years o and seen my share of hard times now another another...Our whole ecomony has left the country and now we are going to be starving. What do we buy health insurance, energy or food. Tell those wonderful elected officials to work that is what we put them in office. Does anyone ever take an old lady serious?