Ethanol and Tortillas

Presently there's a controversy over the price of tortillas and how that's been caused by ethanol driving up corn prices.   Just a couple of extra observations on this issue.  Some reference this Washington Post article:

A Culinary and Cultural Staple in Crisis - Washington Post
Mexico Grapples With Soaring Prices for Corn  --  and Tortillas

"Mexico's corn behemoth is Grupo Gruma, owner of the Maseca tortilla brand and the world's largest tortilla maker. Mota said the company may control as much as 80 percent of the Mexican tortilla flour market. The company has already drawn his ire by allegedly buying a competitor without the competition commission's approval."

One thing this discussion often seems to miss is that tortillas are made with white corn and ethanol is made with yellow corn.  In spite of NAFTA, there's also evidently a limit on how much white corn can be imported from the USA.   Prior to the price hike, the Fox government allowed some exports of white corn to be made instead of warehousing an adequate amount of the product for the proverbial rainy day. 

Too much free-market mentality or too little here?

In other words, there are fishy things going on within the Mexican white corn and tortilla market completely unrelated to ethanol demand in the USA.   One might obviously ask why white corn is indexed to yellow corn.  There might also be some consideration given to the large monopolies in Mexico that may have some small interest in encouraging the concept that it's all the fault of gringo ethanol plants in Nebraska.

I haven't checked lately but I wonder if popcorn prices are going up in the USA.  Perhaps that would be a good comparative indicator since it's also not used in ethanol production but only for direct food consumption.

One other thing, prior to the rise in prices, NAFTA was blamed for pushing corn prices down in Mexico which resulted in many subsistence farmers leaving their land for El Norte.  One might think that higher corn prices in Mexico would be a good thing in this regard.  It also should allow Mexican farmers to, once again, make a living.

Higher prices for corn is not a bad thing in and of itself especially if this means an end to farm subsidies for that crop and starts to put American row-crop agriculture back on a more normal market-based system.  

Regarding the much noted "food or fuel" duality,  much of the yellow corn in the USA for food goes for feeding cattle and the distillers grains coming out of the ethanol plant go to the same, I don't see much of a problem there.  The corn is just taking a bypass through the ethanol plant before heading to the cows.  It's not being destroyed like in a corn burning stove.

All ethanol production does is reduce the carbohydrate value of the grain for animal feed and that can be made up with corn stover (aka chopped cornstalks) and other non-food (for people) products (recall cows are still able to convert such things via bacteria their rumens).

Distillers Grains for Beef Cows - Iowa State University - Sep 05

Now the big issue would be how this might affect sugar prices and drive up the price of soda more than the price of beef or milk, imo.  Carbohydrates used for ethanol cannot be used to sweeten soda pop.  Should we be concerned about higher price for Cokes or Pepsi given how they impact our diets?

This may also be the reason why Wrigley's chewing gum has gone towards using artificial sweeteners in their gum (without noting this change on their labels).  I'm not so sure the move from sugar to artificial sweeteners is a good thing.  How much concern we should depend, in part, on the artificial sweeteners involved and if there will be proper labeling of substitutions.

The most promising of ethanol designs is the plant up in Mead, Nebraska that includes a cattle feedlot on location along with a methane digester to process the cattle manure and make energy from it to help run the ethanol plant. A very nicely integrated and energy efficient design that evidently is not very scale dependent. (It doesn't need to be humongous to be viable.)

E3 Biofuels
E3 Biofuels - FAQ

Ethanol and Tortillas

Presently there's a controversy over the price of tortillas and how that's been caused by ethanol driving up corn prices.   Just a couple of extra observations on this issue.  Some reference this Washington Post article:

A Culinary and Cultural Staple in Crisis - Washington Post
Mexico Grapples With Soaring Prices for Corn  --  and Tortillas

"Mexico's corn behemoth is Grupo Gruma, owner of the Maseca tortilla brand and the world's largest tortilla maker. Mota said the company may control as much as 80 percent of the Mexican tortilla flour market. The company has already drawn his ire by allegedly buying a competitor without the competition commission's approval."

One thing this discussion often seems to miss is that tortillas are made with white corn and ethanol is made with yellow corn.  In spite of NAFTA, there's also evidently a limit on how much white corn can be imported from the USA.   Prior to the price hike, the Fox government allowed some exports of white corn to be made instead of warehousing an adequate amount of the product for the proverbial rainy day. 

Too much free-market mentality or too little here?

In other words, there are fishy things going on within the Mexican white corn and tortilla market completely unrelated to ethanol demand in the USA.   One might obviously ask why white corn is indexed to yellow corn.  There might also be some consideration given to the large monopolies in Mexico that may have some small interest in encouraging the concept that it's all the fault of gringo ethanol plants in Nebraska.

I haven't checked lately but I wonder if popcorn prices are going up in the USA.  Perhaps that would be a good comparative indicator since it's also not used in ethanol production but only for direct food consumption.

One other thing, prior to the rise in prices, NAFTA was blamed for pushing corn prices down in Mexico which resulted in many subsistence farmers leaving their land for El Norte.  One might think that higher corn prices in Mexico would be a good thing in this regard.  It also should allow Mexican farmers to, once again, make a living.

Higher prices for corn is not a bad thing in and of itself especially if this means an end to farm subsidies for that crop and starts to put American row-crop agriculture back on a more normal market-based system.  

Regarding the much noted "food or fuel" duality,  much of the yellow corn in the USA for food goes for feeding cattle and the distillers grains coming out of the ethanol plant go to the same, I don't see much of a problem there.  The corn is just taking a bypass through the ethanol plant before heading to the cows.  It's not being destroyed like in a corn burning stove.

All ethanol production does is reduce the carbohydrate value of the grain for animal feed and that can be made up with corn stover (aka chopped cornstalks) and other non-food (for people) products (recall cows are still able to convert such things via bacteria their rumens).

Distillers Grains for Beef Cows - Iowa State University - Sep 05

Now the big issue would be how this might affect sugar prices and drive up the price of soda more than the price of beef or milk, imo.  Carbohydrates used for ethanol cannot be used to sweeten soda pop.  Should we be concerned about higher price for Cokes or Pepsi given how they impact our diets?

This may also be the reason why Wrigley's chewing gum has gone towards using artificial sweeteners in their gum (without noting this change on their labels).  I'm not so sure the move from sugar to artificial sweeteners is a good thing.  How much concern we should depend, in part, on the artificial sweeteners involved and if there will be proper labeling of substitutions.

The most promising of ethanol designs is the plant up in Mead, Nebraska that includes a cattle feedlot on location along with a methane digester to process the cattle manure and make energy from it to help run the ethanol plant. A very nicely integrated and energy efficient design that evidently is not very scale dependent. (It doesn't need to be humongous to be viable.)

E3 Biofuels
E3 Biofuels - FAQ

The Great Global Warming Swindle - YouTube and More Analysis

Found a full copy of the Channel 4 global warming cartoon and skeptic review show (aka "The Great Global Warming Swindle") on the Celsias blog today.   It's down about half way down the blog page next to a headline titled "Update II: Communists and Nazis".   (Hmmm....)

Here is the direct link for however long it lasts.

RealClimate.org has a couple of  responses to it [Swindled!] [Swindled: Carl Wunsch responds].  So does George Monbiot.

The Great Global Warming Swindle - YouTube and More Analysis

Found a full copy of the Channel 4 global warming cartoon and skeptic review show (aka "The Great Global Warming Swindle") on the Celsias blog today.   It's down about half way down the blog page next to a headline titled "Update II: Communists and Nazis".   (Hmmm....)

Here is the direct link for however long it lasts.

RealClimate.org has a couple of  responses to it [Swindled!] [Swindled: Carl Wunsch responds].  So does George Monbiot.