August 23, 2007

Biodiesel Pros and Cons has a nice article on the upsides and downsides of converting crops into fuel.
The shift of American corn production to biofuels has created shortages in other nations. Taiwan experienced such a corn shortage in 2006 that China had to make up the shortfall from previous U.S. sources. Earlier in 2007, a dramatic rise in Mexican tortilla prices was blamed for the shift of American corn exports to ethanol. As forecast by Purdue University, Indiana ethanol production will shortly consume upward of 608 million bushels of corn annually. The result of this diversion, according to USDA chief economist Keith Collins, will be that "the livestock industry will face the challenge of dealing with higher feed costs" over the next several years.William J. Hudson of the ProExporter Network is much more blunt in his remarks from Aug. 2006: "Cheap feed grains like corn may not be possible in a world with crude oil priced at $70 a barrel or more. Cheap meat may not be either."

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