Mexican Corn Farmers Reap Big Profits

Rogelio Zacaula plucks an ear of corn from his field with the pride of a prospector unearthing the gold that legend says is buried in the slopes surrounding the nearby Orizaba volcano.

International corn prices driven by the burgeoning U.S. ethanol industry have soared to their highest in a decade, making farmers like Zacaula feel like they just won the jackpot.

''I have never seen prices like this,'' said Zacaula, 66, who has been growing corn since he was 10. "We suffered for so many years, years in which no one even wanted to buy our crop -- until now.''

Corn had languished around $2 a bushel for years before the ethanol boom caused prices to soar, reaching $4.04 a bushel this week. Corn prices should reach new highs over the next five years, according to Keith Collins, chief economist for the U.S. Department of Agriculture.

Already 111 U.S. ethanol biorefineries are in operation and 78 are under construction, according to the industry's Renewable Fuels Association.

I can't believe that Americans are so gullible. This higher price for corn will negatively impact the poor who actually eat corn, and worse, according to my sources, more pollution is created by raising corn for ethanol than if gasoline was just used as a fuel. Read more.

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Pollution/CO2 wise its probably not as bad as you think. With older production processes, it clearly took more fossil fuel inputs than the energy value of the outputs, but more efficient processes, and higher yield corn are lowering the (energy) cost of food-crop based ethanol with time.
Higher food costs help some poor farmers, but hurt poor consumers.
Of course even if celluosic ethanol comes about, there won't be enough bio-ethanol to replace our present oil consumption, i.e. this is not a reason to be complacent about oil running out.

I found a paper a couple of years ago that eventually found that it took five gallons of ethanol-equivalent energy to produce six gallons of ethanol from corn; I've seen some others that went the other way. Anyway, it seems to be darn close to a wash, and completely impractical for generating any sort of energy independence.

By David RIckel (not verified) on 21 Feb 2007 #permalink

This kind of story is a pet peeve of mine because we in America (except for places like North Dakota where I live) completely misunderstand how huge agriculture is in the economy of the less developed countries. Our country has pushed food prices so low that it is more profitable to burn food than to eat it. After a disaster Oxfam goes into a country with cheap American or European commodities and totally wrecks the markets so farmers can't get access to credit to fix up their farms and have to abandon them and head to the cities. Raise the price of food and the farmers can invest in their farms, hire tradesmen to fix up their houses and barns, buy things from local merchants who can then hire more help to sell them and generally keep rural areas alive. And we really don't care about these people anyway. Corn was the exact same price in 1996 before collapsing again. How many stories did we read about starving Mexicans back in the days of blue stained dresses? When agriculture is 40 to 80 percent of a country's economy, $4 corn is not a disaster, it's a cause for celebration.

By justawriter (not verified) on 21 Feb 2007 #permalink

Corn is scary in general. And it's not the best thing for ethanol. From what I've read, that's sugar, but nobody in the US is really developing sugar ethanol.

This is probably going to have a pretty poor effect on crop diversity, as well. Already, corn goes into soooo many different things (like, every can of soda sold in the US, just for a start), that the last thing we need is a temporary (and it almost certainly will be temporary) boom in corn prices that causes farmers to switch in the hope of riding the wave, only to come crashing down later when prices stabilise. Which will almost certainly happen, because it happens all the time in every industry when there's a fad product like this.

Semi-rant on:
What is the deal with this issue that the left is so antagonistic to a technology that substitutes for fossil fuels, provides farmers with some good news, is at least energy neutral, and reduces the U.S. dependence on foreign energy sources? I have seen this reflexive attack in several places, and I don't get it.

Corn based ethanol is not the ultimate solution, but a first step (sounds like Kyoto doesn't it?) that helps set up infrastructure that can be used by, say, cellulose ethanol sources later.

The fact that corn prices for tortillas and such are controlled by the Mexican government, and food grade corn is also totally market controlled and has been for years there, means that it is obvious that $2 per bushel increases will cause widespread hunger correct? Small farmers suddenly doubling their income is a bad thing of course -sarcasm-

The fact that corn based ethanol is competitive in price with gasoline in the U.S. only with tax breaks, means that it must use more petroleum in its production than its energy. Huh? If that were true the price for that petroleum alone reflected in the ethanol price would be far higher than the ethanol costs (ignoring the taxes). Assuming energy is the main cost factor indicates that it is close to energy neutral. (Ethanol does need those tax breaks). Smaller farmers in the U.S. were decimated by past policies, and now that technology is actually helping them... that has got to be some nefarious plot by big agribusiness ... right???

As corn prices rise there will be intense resources applied to cut those costs by ethanol producers. Sugar, technological advances in cellulose conversion, algae, all these things we have been sniffing around for years will have serious profit based money chasing them, and they all would decrease fossil fuel use...

So why is corn based ethanol reflexively attacked on several forums with pretty marginal attacks. Is it that ADM is involved and they are dirtbags, or what?

And what is the uproar going to be with soy biodiesel which is definitely the next coming thing (several factories going up in Illinois and Wisconsin now and I am sure elsewhere).

Corn and Soy are mainline crops we know how to grow and process in vast quantities. That why things are -starting- there. I don't think they will end there.

How about leaving the grain for animals,including ourselves, and building a car that RUNS ON AIR!! The pressure inside the petrol tank is a staggering 300 bar. One tank of compressed air will enable you to drive for 4500 kilometers. That's about 2800 miles. :o)

Watch the video here: http://www.freshcreation.nl/comments.php?id=920_0_1_0_C

By Diane in Ohio (not verified) on 21 Feb 2007 #permalink

Well in Brazil the ethanol is made from sugar cane (they have been doing it for decades), but as sugar cane doesn't grow very well in the north they are starting with a bulk crop with high sugar content that can easilly be converted.

In the short term this will help the poor farmers in Mexico and good luck to them; no longer will they be pushed to the brink of starvation because of imported, obscenly subsidised, cheap US maize.

In the long term a different source will have to be found (hopefully the poor farmer will not be damaged when the change comes as it should be a gradual change), in principle any organic material can be fermented but for efficient conversion it needs to be a standard product that is fermented so that you can optimise (different yeasts work best on different materials) the process.

A different source will need to be found as even if all maize was turned into alcohol it could only replace about 20% of just the USs petrol usage.

As for the car running on air, that comes in the same category of "clean" electric cars.
Locally they are clean; however you have to pressurise the air and that requires a pump and pumps run on oil or electricty and electricty is transmitted a long way over eyesores called transmission lines, electricty is produced by steam turbines, the steam is produced by boiling water, the water is (most often) boiled using coal or gas or oil.

Overall efficiency very bad, total pollution very high.
Even worse than the overall pollution caused by electric cars.

Think global not local.

The pollution sum would change if we could identify a way to produce enough (please note the enough, wind power isn't enough and those blades make an aweful noise) electricty cleanly.

Would also help if utilities used more efficient transformers and thicker cable, but again producing those is costly and in some cases produces more pollution than the standard product. Cost/benefit needs to be done and chnages may need to be mandated by goverment as the overall cost/benefit may be positive but negative for the utility.

Now Hydrogen fueled cars, there is a possibility for a clean fuel. There has been research done on identifying plankton/algae that produce hydrogen as a waste product, so just supply water, food and sunlight. Electrolysis may also be a way, though to prevent pollution we would have to look at using clean electrical sources and the icelandic goverment is seriously looking at this as it has abundant geo-thermal power.

Now the boogie man appears; nuclear.
Produces no CO2, can produce lots of electricty.
Has some minor problems though. The main one, to my mind, being the irradiated miners in Chad.

By Chris' Wills (not verified) on 21 Feb 2007 #permalink

The move to corn ethanol has already closed two popcorn factories here.

By parrotslave (not verified) on 22 Feb 2007 #permalink