Gas prices hovering near $3/gal. have a way of turning talk about energy costs to ethanol and the price of corn.
These conversations generally begin calmly enough. But when industry prognosticators start talking about corn at $3/bu. or more, folks start getting edgy — kind of like a caffeine-induced anxiety attack that I loosely describe as the “ethanol jitters.”
The ethanol question presents a real catch-22 to pork producers.
On the one hand, supporting greater independence from foreign oil is certainly the right thing to do.
On the other hand, the competition for corn will surely drive pork production costs higher.
This paradoxical situation is reinforced daily. Pick up most any farm magazine and there's likely to be an ethanol story emblazoned on the cover. Flip through TV channels in search of an evening news program and you're bound to be interrupted by an advertisement for flex-fuel vehicles or a public service announcement singing the praises of ethanol.
When news programming returns, you'll hear reports of escalated fighting in the war-torn Middle East, refueling the uneasiness about our reliance on the world's petroleum supplies.
In business news, we hear that the world's largest oil company, Exxon Mobil Corporation, recently filed their second quarter earnings report, revealing profits 36% ($7.64 billion) above a year ago and the second-largest quarterly profit report in their history.
Rest assured, major oil companies will be lining up to bid up the price of ethanol needed to blend with their refined gas. That will spell trouble in pork producer ledgers.
Must It Be Corn?
The approach to renewable, plant-based fuels is really two-pronged. One is to minimize the petroleum-based fertilizers and pesticides needed to raise a crop. The other is a search for crops to serve as a source of the biomass needed for ethanol production.
Certainly, swine manure can help lower fertilizer costs and improve yields. But there's an irony here. While swine manure boosts corn yields and potential profits for investors in ethanol plants, it also lines their pockets with funds to bid up the price of corn.
Are there no alternatives?
The most interesting approach to biofuels production that I've seen recently came from University of Minnesota ecologist David Tilman and his colleagues in the College of Biological Sciences. Tilman argues, instead of growing a single fuel-source crop like corn, why not grow many species together, generating more total vegetation and reducing the chances of crop failure in any one species?
Makes sense to me.
Tilman and his fellow researchers recently published a paper in the journal Nature, summarizing 12 years of experiments.
“It shows unequivocally that plots of land with numerous species produce much more biomass and suffer less from fluctuations of productivity than plots with only one or a few species. This makes diverse plantings the likeliest candidates to drive the ‘bio’ revolution,” states Tilman in a university news release.
This diverse biomass source “can be burned for energy or refined to produce concentrated energy in the form of biofuels, such as ethanol or syn(thetic) gasoline and diesel,” he continues.
“Diverse prairie grasslands are 240% more productive than grasslands with a single prairie species,” he explains. “Restoring land so it can produce biofuels is a new idea, but there are many reasons to do it.”
Tilman's work suggests that the multiple-species prairie plants will produce fuels such as ethanol, with greater net energy gains/acre than corn, soybeans or even switchgrass, the source of biomass energy used extensively in Brazil's ethanol production.
I checked USDA's Conservation Reserve Program (CRP) website and found the enrollment of farmland at all levels, including farmable wetlands, is tallied at over 36 million acres, with an annual payment averaging nearly $49/acre. The total tab for these diverted acres is projected at $1.76 billion annually, as of June 2006.
Not all of that land could be harvested, nor does it account for the cost of removing, transporting and processing the biomass. But, if we are serious about solving our “addiction to foreign oil,” perhaps harvesting the cover crops on those CRP acres could help recover some of those expenditures. Then, more of our valuable corn and soybean acres could continue to provide food and fiber for people and pigs.