Re: SC40

http://www.theglobeandmail.com/servlet/story/RTGAM.20070404.wxcoethanol04/BNStory/specialComment/home

The cob-smacking truth about the cost of ethanol

Agriculture in North America has abruptly moved into the business of making energy, mostly corn-based ethanol, a renewable fuel. Canadians are caught up in the boom, but they may be surprised at the effect the ethanol rage will have on their wallets at the grocery store as food use of corn faces strong, permanent competition from fuel use.

Grain corn is one of nature's wonders and it happens to be the largest source of food in North America. Walk down any aisle in a supermarket and randomly pluck a food item off the shelf -- chances are that it contains corn. Many ingredients in processed foods are corn-based. Corn is also an important source of livestock feed. Thousands of food items contain it, either as a direct ingredient (such as corn chips) or indirectly from a corn-fed cow or chicken (such as milk). We complain now about the cost of filling our cars with gas; we may soon be complaining about filling our bodies with food.

The United States is by far the world's largest supplier of corn. Canada imports about 20 per cent of its needs from the United States because the northern climate is less ideal for corn production.

The price of corn in Canada is tied to the U.S. price, which means Canadian food will become more expensive as more and more corn is diverted for ethanol. Higher corn prices mean more land will be used for corn production and less for other crops, raising the price of other crops, such as soybeans. Higher corn prices may also result in reduced livestock production, as the cost of feed increases. The next time a drought hits the corn belt, livestock farmers will be the first to go broke and we will all take notice.......