"The authors concluded that the then-current version of the biofuels mandate was raising the global price of food by between 20–30 percent."
They said no such thing.
What they said was that the average price per calorie of four staple crops (wheat, rice, corn, soybeans) went up 20%, after accounting for the "recycling" of waste from ethanol manufacturing. The price of staple crops is only part of global food prices -- being very cheap per calorie is what makes them staples! In rich nations, their contribution to food costs is tiny. We'd hardly notice.
Now, a hike in staple prices is a bigger deal in poor nations, and the ethanol mandate is deeply stupid for a variety of reasons, so the overall point stands. But sloppy statistics leading to wild claims like this really undermines your case.
I was literally just talking about how stupid this policy was the other day and the people I was talking to just stared at me like I was from outer space. I think because Ethanol is a bipartisan thing, people in our ridiculous culture war age don't know what to think about an issue that doesn't neatly align with with the right-left political spectrum.
Eliminating this ridiculous and wasteful policy is such low hanging fruit I can't believe that the Trump Administration doesn't just push this through and take the win - except that said Administration is run by a gang of incompetent clowns.
I suppose it would be a tough sell as zero minorities or immigrants would be hurt.
Matt did an interview with Michael Grunwald about his book, We Are Eating the Earth, which does a great job documenting how even ardent climate activists got the carbon math on corn ethanol wrong. Land isn't free!
Corn accounts for between 5 and 8% of Iowa’s state GDP, and even if the biofuels mandate were ended, people would still by corn to feed animals and make high fructose corn syrup and lots of those additives with unpronounceable names. And even some to eat. I suspect that eliminating the mandate would hurt a few large companies, but Iowa itself would be fine.
Hi! Paper you should be aware of for this! Sadly, it’s still unpublished, but it’s a good sound paper (and widely taught). The land use elasticity is very big, the price elasticity is much smaller.
Now obviously, the point of the paper is the methodological contribution — with price-takers, you can convert dynamic decisions into a linear regression — but the results are relevant here.
This is kind of a subset of a broader observation, which is that legacy Dems continue to support incredibly cost-inefficient, weird farm subsidies to rural areas even though the people in those areas vote by Assad margins against Dems. It's the domestic analogue to Israel. Stop voting to give away money to bad people who work against you!
Scrapping the ethanol mandate is a good idea on the merits, but simply waiting for electric cars to make the issue moot seems like better politics. Why have a huge fight about something that will end in 10 years anyway?
Also, Iowa may not be a swing state exactly, but it’s not out of reach if the Dems moderate in the ways you’ve been advocating. Isn’t this column at odds with the goal of winning the Senate?
Interesting column! Still, large scale agriculture is a good fit with wind power. According to this article, in 2023, Iowa generated 59% of electricity from renewables, which at that point made it 6th in the country for the use of renewable energy.
I agree with almost everything you said *except* that this would be a fast acting switch. Since you usually can't easily convert most big corn fields into produce farming at the drop of a hat it would take a number of years for the effects to work their way through the system and convince farmers to shift production.
And that is why I kinda doubt it will happen. You need politicians to harm the concentrated interest of farmers now in the hope of reducing grocery prices likely after the next election. Sigh.
A+ piece, Matt Y, agree with everything, growing corn for ethanol is stupid, wasteful, and bad for the environment and food prices.
I will say, though, that I would not conflate "corn ethanol" with the broader class of "biofuels," which still have potential. About 20 years ago (God I'm old) I became interested in the use of synthetic biology to generate new and improved biofuels. I haven't kept up with the field, but back then researchers were really gung-ho on programming microorganisms to either a) generate biofuels out of cheap feedstocks or b) to harness photosynthesis to make biofuels out of CO2 in the air. For a), Yarrowia lipolytica, a yeast species that is good at lipid synthesis (it's right there in the name!), was a popular model organism. For b), you want genetically engineered cyanobacteria.
Of course, problems abound. Inserting single transgenes into a microbe can be challenging, depending on the species, and here we're talking about whole *biosynthetic pathways* with multiple enzymes, not to mention that when you're forcing a yeast or bacterial cell to work really hard to spit out biofuel molecules for you, you're putting that cell under a ton of selective pressure to shut down that biosynthetic pathway. For cyanobacteria, if you grow them in open ponds exposed to sunlight, you're at very high risk of contamination with unwanted microbes that will outcompete your lovingly engineered cells, and if you grow them in enclosed, sterile environments under artificial lights, the energy for those lights has to come from somewhere.
TL;DR: Engineering microbes to make biofuels at scale is hard! Again, I don't know what advances have been made in the field over the past 20 years; at any rate, I haven't seen anything about it in the popular media. But I wouldn't give up on it. Of course, it would help to have a government that supports basic scientific research.
Sure, biofuels could make sense. Corn ethanol could make sense. Solar + batteries could make sense.
The way to determine what makes sense is not to have an act of congress decide it, nor even to have some panel of well-intentioned bureaucrats decide how things should work. This is what markets are really good at, so we should let markets function here. Put a tax on externalities like CO2 emissions, and then let people work out what's best wrt making their cars and trucks go, keeping the lights on, etc.
You'd think the good people of Iowa, and especially their leaders, would understand how vital it is for their state to be a swing state in the Electoral College so that both parties have reason to support the biofuel mandate. And the truth over the past 40 years is that Iowa has swung between periods of favoring Democrats and favoring Republicans (as well, in 2000 and 2004, of being a coin flip between the two). In the past three (Trump) elections, Iowa swung solidly in the Republican camp. If they continue that, and Democrats don't foolishly return to worshipping at the Iowa caucuses altar, then they face a real prospect that the Democrats once back in power will wave bye bye to the mandate.
Iowa is sort of like Israel here (let the comments erupt!) Historically, Israeli leaders have understood the necessity for keeping on good terms with both Republicans and Democrats and then Bibi threw that strategy in the trash can and the prospects have increased that Israel will reap what it has been sowing. I caution Iowa not to make the same mistake.
I mean, that's only true if the price of a gallon of gas is the same as a gallon of ethanol. Both are dependent on demand but e85 is reliably 20% cheaper.
"The authors concluded that the then-current version of the biofuels mandate was raising the global price of food by between 20–30 percent."
They said no such thing.
What they said was that the average price per calorie of four staple crops (wheat, rice, corn, soybeans) went up 20%, after accounting for the "recycling" of waste from ethanol manufacturing. The price of staple crops is only part of global food prices -- being very cheap per calorie is what makes them staples! In rich nations, their contribution to food costs is tiny. We'd hardly notice.
Now, a hike in staple prices is a bigger deal in poor nations, and the ethanol mandate is deeply stupid for a variety of reasons, so the overall point stands. But sloppy statistics leading to wild claims like this really undermines your case.
I was literally just talking about how stupid this policy was the other day and the people I was talking to just stared at me like I was from outer space. I think because Ethanol is a bipartisan thing, people in our ridiculous culture war age don't know what to think about an issue that doesn't neatly align with with the right-left political spectrum.
Eliminating this ridiculous and wasteful policy is such low hanging fruit I can't believe that the Trump Administration doesn't just push this through and take the win - except that said Administration is run by a gang of incompetent clowns.
I suppose it would be a tough sell as zero minorities or immigrants would be hurt.
Ah, very strong closer Matt. You set that up perfectly. Kudos
William Jennings Yglesias
It's a dumb policy. The only real question is whether it's unwise, stupid, or nuts.
Technically I think corn's a seed, not a nut
Matt did an interview with Michael Grunwald about his book, We Are Eating the Earth, which does a great job documenting how even ardent climate activists got the carbon math on corn ethanol wrong. Land isn't free!
The link: https://www.slowboring.com/p/real-talk-about-agriculture-and-climate
Corn accounts for between 5 and 8% of Iowa’s state GDP, and even if the biofuels mandate were ended, people would still by corn to feed animals and make high fructose corn syrup and lots of those additives with unpronounceable names. And even some to eat. I suspect that eliminating the mandate would hurt a few large companies, but Iowa itself would be fine.
Hi! Paper you should be aware of for this! Sadly, it’s still unpublished, but it’s a good sound paper (and widely taught). The land use elasticity is very big, the price elasticity is much smaller.
https://www.ptscott.com/papers/ptscott_jmp.pdf
Now obviously, the point of the paper is the methodological contribution — with price-takers, you can convert dynamic decisions into a linear regression — but the results are relevant here.
This is kind of a subset of a broader observation, which is that legacy Dems continue to support incredibly cost-inefficient, weird farm subsidies to rural areas even though the people in those areas vote by Assad margins against Dems. It's the domestic analogue to Israel. Stop voting to give away money to bad people who work against you!
Scrapping the ethanol mandate is a good idea on the merits, but simply waiting for electric cars to make the issue moot seems like better politics. Why have a huge fight about something that will end in 10 years anyway?
Also, Iowa may not be a swing state exactly, but it’s not out of reach if the Dems moderate in the ways you’ve been advocating. Isn’t this column at odds with the goal of winning the Senate?
Interesting column! Still, large scale agriculture is a good fit with wind power. According to this article, in 2023, Iowa generated 59% of electricity from renewables, which at that point made it 6th in the country for the use of renewable energy.
https://yaleclimateconnections.org/2023/02/us-state-with-most-renewable-energy-production/
Maybe more wind turbines would help farmers weather low prices in the long term.
I thought it was the Iowa caucus not Iowa being a swing state that was the cause of this mess
I agree with almost everything you said *except* that this would be a fast acting switch. Since you usually can't easily convert most big corn fields into produce farming at the drop of a hat it would take a number of years for the effects to work their way through the system and convince farmers to shift production.
And that is why I kinda doubt it will happen. You need politicians to harm the concentrated interest of farmers now in the hope of reducing grocery prices likely after the next election. Sigh.
A+ piece, Matt Y, agree with everything, growing corn for ethanol is stupid, wasteful, and bad for the environment and food prices.
I will say, though, that I would not conflate "corn ethanol" with the broader class of "biofuels," which still have potential. About 20 years ago (God I'm old) I became interested in the use of synthetic biology to generate new and improved biofuels. I haven't kept up with the field, but back then researchers were really gung-ho on programming microorganisms to either a) generate biofuels out of cheap feedstocks or b) to harness photosynthesis to make biofuels out of CO2 in the air. For a), Yarrowia lipolytica, a yeast species that is good at lipid synthesis (it's right there in the name!), was a popular model organism. For b), you want genetically engineered cyanobacteria.
Of course, problems abound. Inserting single transgenes into a microbe can be challenging, depending on the species, and here we're talking about whole *biosynthetic pathways* with multiple enzymes, not to mention that when you're forcing a yeast or bacterial cell to work really hard to spit out biofuel molecules for you, you're putting that cell under a ton of selective pressure to shut down that biosynthetic pathway. For cyanobacteria, if you grow them in open ponds exposed to sunlight, you're at very high risk of contamination with unwanted microbes that will outcompete your lovingly engineered cells, and if you grow them in enclosed, sterile environments under artificial lights, the energy for those lights has to come from somewhere.
TL;DR: Engineering microbes to make biofuels at scale is hard! Again, I don't know what advances have been made in the field over the past 20 years; at any rate, I haven't seen anything about it in the popular media. But I wouldn't give up on it. Of course, it would help to have a government that supports basic scientific research.
Sure, biofuels could make sense. Corn ethanol could make sense. Solar + batteries could make sense.
The way to determine what makes sense is not to have an act of congress decide it, nor even to have some panel of well-intentioned bureaucrats decide how things should work. This is what markets are really good at, so we should let markets function here. Put a tax on externalities like CO2 emissions, and then let people work out what's best wrt making their cars and trucks go, keeping the lights on, etc.
I genuinely don't know. Like I said, I haven't been following this field for years.
You'd think the good people of Iowa, and especially their leaders, would understand how vital it is for their state to be a swing state in the Electoral College so that both parties have reason to support the biofuel mandate. And the truth over the past 40 years is that Iowa has swung between periods of favoring Democrats and favoring Republicans (as well, in 2000 and 2004, of being a coin flip between the two). In the past three (Trump) elections, Iowa swung solidly in the Republican camp. If they continue that, and Democrats don't foolishly return to worshipping at the Iowa caucuses altar, then they face a real prospect that the Democrats once back in power will wave bye bye to the mandate.
Iowa is sort of like Israel here (let the comments erupt!) Historically, Israeli leaders have understood the necessity for keeping on good terms with both Republicans and Democrats and then Bibi threw that strategy in the trash can and the prospects have increased that Israel will reap what it has been sowing. I caution Iowa not to make the same mistake.
I had not scrolled down to this before posting my own comment containing an identical analogy, so... great minds, I guess.
Strong upvote for that analogy.
Also: Ethanol reduces gas mileage. Going from 10% to 15% ethanol will boost per-mile costs for drivers.
I mean, that's only true if the price of a gallon of gas is the same as a gallon of ethanol. Both are dependent on demand but e85 is reliably 20% cheaper.
E85 is only for flex fuel vehicles. E15 can supposedly be used in regular cars.
I know, it's just a stand-in for the relative consumer price of ethanol vs. regular gas.