Monsanto's Biofuels Story -- Food and Fuel: It’s not an "either/or" equation


biofuelsStories about rising food prices and shortages in parts of the developing world have raised the question: is it appropriate to use food crops for biofuels production?

The topic is important and appropriate. But asking the question in this way assumes a conflict between food and biofuels production. This assumption is false and ignores the incredible potential for agriculture to meet the growing demands for food, feed and fuel.

Many who question the ability of agriculture to meet the growing demands for food, feed and fuel pessimistically believe crop yields remain static. A quick review of historical data from the USDA shows that’s simply not the case.

Supported by history and leading scientific research, we take a more optimistic view. As a result of better plant breeding, biotechnology and the investments companies like Monsanto have made over the past decade; farmers today are producing more crops per acre than ever before.

Take corn for example. In 1979, corn yields averaged 91 bushels per acre. It was 137 bushels per acre in 2000 and more than 150 bushels per acre today (Source: USDA).

Based on the science and preliminary research we’ve conducted here at Monsanto, we believe we can increase corn yields to 300 bushels per acre as a national average by 2030, all while keeping inputs like water and nitrogen relatively the same or perhaps even reducing them (Source: Monsanto).

Just as critics have ignored the potential for agriculture to improve grain yields, others have made false statements about biofuel production and increasing food prices. As before, these flawed arguments often start with false assumptions.

Recent media reports have amplified anti-biofuel sentiment which maintains that demand for corn and soy for biofuel production is a major--if not the major--cause of the world’s current food problems. These reports have called for cuts or the elimination of support to develop a biofuels industry. Such action would not only be short-sighted, but would also do more harm than good to both food prices and fuel prices--both in the short and long term.

An objective analysis demonstrates that grain shifting to the production of biofuels represents only a small part of increased food prices. The biggest cause of increased food costs--the staggering and rapidly increasing cost of crude oil--goes largely unmentioned.

Take for consideration that out of every dollar American families are spending on higher food and fuel prices, on average 75 cents goes to fuel and 25 goes to food. Much of these extra 25 cents for food is directly attributable to the $120+ per barrel of oil, since it drives up the cost to not only produce food, but to transport and process it as well.

Still others maintain that food shortages and rising prices in other parts of the world are directly tied to biofuels production in the United States, when in fact, there is virtually no connection to biofuels and these unfortunate shortages around the globe.

Again, consider corn. U.S. corn ethanol production has been loudly criticized, and in some cases singled out, as the reason for global food shortages. But the fact is the U.S. exported nearly 15 percent more corn in 2007 than in either of the two previous years (Source: USDA). And just as an aside, rice--the world’s most widely used food crop--has increased in price at rates comparable to corn and soy but rice is not used for biofuels production (Source: USDA).

The fact is the demand for rice, other foodstuffs and feed is increasing--particularly in countries like China and India.

In reality, the elimination of biofuels would end up costing the average consumer more--both at the pump and the grocery store. In the short-term, it’s estimated that elimination of ethanol at the gas pump would result in price increases in the U.S. between 29 and 40 cents per gallon. This would impact consumers both at the pump and in the very transportation of their food from one point to the next. All totaled, this leads to more than $300 per year in additional cost for the average American family. Compare this to the $60 to $80 increase in food costs attributable to ethanol and it becomes more cost effective for the average consumer to support biofuels than oppose it (Source: Federal Reserve Bank).

Finally, critics maintain that ethanol--and specifically corn-based ethanol--is bad for the environment and takes more energy to create than it supplies. Once again, these claims are false, and despite lack of coverage of the facts by popular press, claims to the contrary have been supported by some of the nation’s leading experts.

Consider the following:

  • A 2008 study by the Argonne National Laboratory found that ethanol production since 2001 has reduced water usage by 27 percent, reduced electricity use by 16 percent and reduced total energy use by 22 percent.
  • A 2005 study from the Argonne National Laboratory stated that ethanol has a positive net energy balance taking 0.7 of one unit of fossil energy to make one unit of ethanol. By comparison, it takes 1.23 units of fossil energy to make one unit of petroleum gasoline.
  • Further, the U.S. Department of Energy estimates that corn ethanol produces about 20 percent fewer greenhouse gas emissions on a lifecycle basis. And blended ethanol and gasoline emit fewer emissions as well. And, unlike petroleum, ethanol doesn’t harm groundwater.

Blaming biofuels for rising food prices and global food shortages while claiming they are bad for the environment is easy. What’s hard is coming up with ideas that provide both long term solutions to the increasing demands for food, feed and fuel. At Monsanto, we know that innovation in agriculture is delivering more food from the same acreage than ever before. By increasing the productivity of agriculture, we move down the path to meeting all of the needs of a growing world. We know that farmers, armed with new technology and practices can create enough grain for food, feed and fuel.

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Last Updated: 02/26/2009