Corn supply seems adequate for fuel, feed, food and exports Corn supply seems adequate for fuel, feed, food and exports
• Higher corn prices get blamed for higher overall food prices, but in this real example, the actual dollar value received by the farmer has relatively low impact on the overall cost of food at the grocery store.
November 13, 2013
There has recently been a lot of discussion about corn for food versus corn for fuel.
Here are some numbers on corn in the United States that are often lost in this discussion
Based on 2011 estimates, corn for direct food consumption was about 5 to 10 percent of total U.S. production. Fuel ethanol was 38 percent, feed and residual was 38 percent, and exports were 14 percent. (Source: USDA-ERS Yearbook).
Some of the categories than can be counted in corn for food include: 1 percent for cereals and other products (corn flakes and tortilla chips); 4 percent for corn sugar (high fructose corn syrup), 2 percent for starch, 2 percent for glucose and dextrose and 1 percent for alcohol (bourbon, whiskey, vodka).
Some of the starch, glucose and dextrose are used for industrial purposes (absorbent material in baby diapers) so not all of those should be counted in the food category.
Specific hybrids of corn are grown for the cereals and other products market.
Corn was harvested on 84 million U.S. acres in the 2011 marketing year and is expected to be harvested on about 87 million acres this year. These numbers are up over the last 10 years, but still down from our overall highs around 1909 to 1918 when corn for grain was harvested on over 100 million U.S. acres.
Corn is also grown as a forage crop and some acres are destroyed by bad weather events. Those acres are not included in the harvested grain acres above.
Corn farmers in Kentucky often grow soybeans and wheat in their rotations. Soybeans were harvested on 73.8 million U.S. acres in 2011 and 76.1 million acres last year. Wheat was harvested on 45.7 million acres in 2011 with about 10 million more planted in the U.S. (some of which is used as a forage or a cover crop, some of which is destroyed by bad weather events). Source: USDA-ERS Yearbook
Corn produced much more efficiently
Corn is being produced much more efficiently since 1980. From 1980 to 2011, corn:
• Per Acre: yields increased 64 percent;
• Per Bushel:soil erosion decreased 67 percent, decreased irrigation water 53 percent and energy use 44 percent;
• Total impact:decreased soil erosion 31 percent, increased total land use 21 percent, increased irrigation water 27 percent, and energy use 14 percent;
• source Field to Market Report: http://www.fieldtomarket.org/report/.
Some of the numbers used in the food vs. fuel debate are from older sources. Because farmers have increased yields by 64 percent and decreased per bushel energy use by 44 percent since 1980, using old numbers can result in wrong conclusions.
None of these numbers refer to sweet corn which is grown on other acres. Sweet corn is grown on about 600,000 to 800,000 acres overall. (USDA Census 1987-2007).
The majority of farmers in Kentucky rotate field corn with soybeans or wheat and double-crop soybeans.
While there is concern about using corn for ethanol production, we currently produce enough corn to meet the demands for fuel, feed for livestock and food for people. In addition, we are able to export more corn to other countries than we eat directly.
When looking at what corn costs, when corn reached an all-time high of $8.03/bushel last year, a 24-oz box of corn flakes cost $3.28 at Walmart.
If the entire 24 ounces was corn (not sugar, or other ingredients), then the value of corn in that box was $0.22.
If we assume a premium, then that value may have been $0.33 per box.
The current market price of corn is $4.35 per bushel, which is about $0.12 of corn per box. But the price of the 24-oz box of corn flakes is still $3.28. While corn prices dropped 46 percent, the price of corn flakes was unchanged.
Higher corn prices get blamed for higher overall food prices, but in this real example, the actual dollar value received by the farmer has relatively low impact on the overall cost of food at the grocery store.
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