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Marketplace

The nest is full

Oct 11, 2019

A hard look at corn economics — and world hunger

Dan Weissmann Oct 6, 2014
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The corn harvest is coming in, and great weather has produced a record crop. This is terrible news for farmers: Oversupply means cratering prices.

If that sounds like a paradox, consider this: Corn, the biggest crop in our agricultural powerhouse of a nation, is not a foodstuff. It’s a highly refined industrial material—more like aluminum than apples. And a hard look at corn economics puts world hunger in a different light. 

Let’s start at an ethanol plant: Lincolnway Energy, in Nevada, Iowa. CEO and President Erik Hakmiller is our guide.

The plant includes several big buildings, lots of loud noises… and some unexpected smells. One is hard to place at first. “What you smell is residual carbon dioxide, and a cooking— very much like a bakery smell,” says Hakmiller.

Then Hakmiller opens the door to a giant building with a corrugated metal roof.  

It’s a barn. Inside are these golden mountains—piled-up flakes of grain.

Mountains of grain at Lincolnway Energy in Nevada, Iowa, from Dan Weissmann on Vimeo.

For every bushel of corn that comes to Lincolnway Energy, only a third comes out as ethanol. Another third comes out as carbon dioxide, which goes into soda pop.

The rest—the fat, fiber and protein—ends up on one of these piles. “Each pile being about a thousand tons,” says Hakmiller.

That’s one day’s worth of this stuff, called distillers grains.

“It’s good food for cows, chickens and pigs,” Hakmiller says. Just as important, it’s cheap.

For animal feeding, you feed the lowest cost to get the most growth out of the animal,” he says. “So, everything has to price itself into the ration. Because a cow doesn’t say, ‘I’m eating Italian tonight.’ He’s got to eat whatever he gets fed.”

If he’s in a feedlot—where most cows gain half their body weight—he’s probably eating corn, either distillers grains or the whole kernel.

And we are not. We wouldn’t recognize it.

Chris Edgington has been growing corn for decades. Here’s what his corn isn’t: “It is not the corn you eat off the cob,” he says. “It is not what’s in the can. It is not what’s in the freezer, in the bag. It is not that product.”

That product, sweet corn, is a different crop. And a lot smaller. Last year, for every pound of sweet corn, U.S. farmers grew more than 260 pounds of field corn.

Which goes to farm animals. If you are what you eat, they are, more than anything else, corn.

So, when we eat a ham-and-cheese omelette, that’s mostly corn.

“It’s a very small component of other foods,” says Joseph Glauber, chief economist of the United States Department of Agriculture. “People talk about high-fructose corn syrup, but…”

Want to guess how much of the corn crop goes to corn syrup?

Three-and-a-half percent. A little less than that goes to other sugars, plus alcohol for vodka.

Actual corn-type food—Doritos, Jiffy cornbread mix, cornflakes—represents 1.5 percent of the corn crop.

For stuff we eat and drink, that’s about it.

Other than as a low-cost ration for animals, the big use for corn is ethanol.

Ethanol has been booming since 2000; there’s eight times as much now.

That’s been great for corn farmers because they have so much corn to get rid of.  

“The joke in farm country has always been, if you give a farmer a market, he’ll overproduce it,” says Monte Shaw, executive director of the Iowa Renewable Fuels Association, the state’s ethanol lobby. “And quite frankly, for over 200 years, that’s been pretty true, except for these last eight years, when ethanol sucked up all that extra corn production.”

Extra production is not one year’s bumper crop, and it is not just the extra acres that got planted after the ethanol boom.

It’s a long-term constant. Productivity—the yield from one acre of cornfield—has been ratcheting up for decades and decades.

Even in 2012—a terrible drought year, with the worst yields in more than 15 years—productivity was more than twice as high as any year before 1960.

Which puts the whole food-versus-fuel question in a new light.

We plant more than 90 million acres of corn, and it’s in huge surplus. And it’s not even food. What if we planted actual food instead?

I put that question to Bruce Babcock, an economics professor at Iowa State University who studies corn, ethanol and renewable fuels.

“Our ability to supply the world with vegetables is practically unlimited,” Babcock said.

Take corn, and add in other giant crops that basically just feed animals—crops like soybeans, barley, hay, sorghum—and two-thirds of U.S. farmland goes to animal feed.

“Such a small portion of our land goes to grow actual food that people consume,” said Babcock, “that if we really wanted to increase that supply, it would be pretty easy.”

The trick would be convincing the countryand other countries that import animal feed from the U.S.to go vegan.

“There would be such a surplus of farmland to grow kumquats and pecans that we would be awash in those, in a heartbeat,” says Babcock.

Would it be enough to feed the 10 billion people the United Nations projects as global population by 2100

“We would have more land available for the 10 billion than they would know what to do with,” says Babcock.  

But we don’t. Thank markets.

“That’s not what consumers want,” says Babcock. “As they get more money, they want to eat meat.”

So farmers plant corn.

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