MANAGING Tough Times Ethanol Issues Food versus Fuel – Domestic Food versus Fuel – International...

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Ethanol Issues

• Food versus Fuel – Domestic

• Food versus Fuel – International

• Energy Balance

• Community Impacts

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Food vs. FuelDomestic

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Food Losses at the Retail, Foodservice and Consumer Levels, 1995

Edible Food Supply * PercentCommodity (million pounds) LossGrain Products 45,606 32%Fruit 48,338 23Vegetables 63,077 25Dairy Products 76,276 32Meat, Poultry & Fish 51,466 16Eggs 7,918 31Caloric Sweeteners 38,827 31Other 24,374 30Total 355,883 27% * Excludes non-edible food parts.Source: Economics Research Service, USDA

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1) Sudan  2) Somalia  3) Chad  4) Central African Republic  5) Democratic Republic of Congo  6) Rwanda  7) Kenya  8) Uganda  9) Ethiopia

U.S. food supply is 3,800 calories per person per day (USDA, 1994). If the avg. person needs 2,000 calories per day, the excess calories could provide all of the caloric needs of:

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Food vs. FuelInternational

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Impact of Commodity Prices on Consumer Food Budgets  

High-income Low-Income, Food-Countries Deficit Countries

Base ScenarioIncome $40,000 $800Total food expenditure $4,000 $400Food cost as % of income 10.0% 50% Staples as % of food spending 20% 70%Expenditures on staples $800 $280

  New Scenario: 50% price increase in staples,

Expenditures on staples $1,200 $420Total food expenditure $4,400 $540Food cost as % of income 11% 67.5%

These are illustrative food budgets that characterize the situations for consumers in high- and low-income countries.

Source: Global Agricultural Supply and Demand: Factors Contributing to the Recent Increase in Food Commodity Prices/WFS-0801, Economic Research Service, USDA.

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Policy Changes to Discourage Exports (keep within country)

 1. Eliminate Export Subsidies – China2. Implement Export Taxes – China, Argentina, Russian,

Kazakhstan, Malaysia3. Export Restriction (quantitative) – Argentina, Ukraine, India,

Vietnam4. Export Bans – Ukraine, Serbia, India, Egypt, Cambodia,

Vietnam, Indonesia, Kazakhstan5. Reduced Import Tariffs – India, Indonesia, Serbia, Thailand,

EU, Korean, Mongolia6. Subsidize Consumers – Morocco, Venezuela Source: Global Agricultural Supply and Demand: Factors Contributing to the

Recent Increase in Food Commodity Prices/WFS-0801, Economic Research Service, USDA.

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Energy Balance

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Btu Used to Make One Btu at the Fuel Pump *

 Total FossilBtu Fuel Btu

Corn Ethanol ** 1.75 .74Cellulosic Ethanol 2.25 .10Gasoline 1.23 1.23 * Argonne National Laboratory ** Dry Mill

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British Thermal Units Generated from One Btu of Fossil Fuels *

BtuCorn Ethanol 1.36Gasoline .81Electricity .45Coal .98Cellulosic Ethanol 10.31 * Argonne National Laboratory

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Community Impact

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Job Impact – 100 MGY Ethanol Plant

Ethanol Plant – One job per 5,176 ac. Corn

Total – One job per 1,400 acres of Corn