Here are some minor facts concerning a particular subsidy, courtesy of an The Wall Street Journal op-ed.
USDA lowered its 2012 corn forecast by 13% from last year’s, to 10.8 billion bushels, the shortest harvest since 2006, even though the planted acreage is the highest since 1937 and 4% more than last year.
only 24% of the corn crop is in good or excellent condition in the 18 major corn belt states, down from 72% just since June.
USDA’s world agricultural outlook board estimated that global corn consumption will be reduced by 38.9 million tons, with US problems responsible for ¾ of the shortage.
As a result,
Corn futures are up nearly 50% over the last six weeks. The US accounts for 60% of global exports, and corn feeds cows, pigs, chickens, and humans through its role as a key ingredient in a broad range of foods.
Those corn futures will be realized as actual, sharp price increases that consumers will pay. The price increase wouldn’t be so bad, but for a certain Federal subsidy.
The food-to-fuel mandate, Renewable Fuels Standard, requires 13.2 billion gallons of ethanol to be blended into the gasoline supply this year, rising to 36 billion gallons by 2022. Fully 40% of 2011′s corn production went to ethanol, and courtesy of our EPA (though the subsidy originated in an earlier administration), and now more corn is devoted to fuel than to livestock or other foods.
But not to worry. Despite the drought, the resulting corn crop failures, and the succeeding price increases driven by the crop failure, despite all of these hardships and negative impacts on the food supply, the ethanol makers got theirs. The Renewable Fuels Association put out a statement, without a trace of irony, that there’s no danger of an ethanol shortage:
obligated parties under the RFS will have every opportunity to demonstrate compliance this year.
Helps to have your priorities straight.