Wednesday, May 02, 2007

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The corn bone's connected to the milk bone

On the local radio station a couple of days ago, they told me that the price of a gallon of milk in New York has risen by 60 cents since January. It is now, they say, more than $3.50 a gallon, some 10% more than the $3.15-or-so-per-gallon price for auto fuel. The high price is, it seems, due to our desire to “wean ourselves from foreign oil.”

Whoa. Back up a moment. Say what?

What does foreign oil have to do with milk? OK, it's simple; here's how it works:

  1. We want to reduce our dependence on foreign oil. One way we can do that is to develop alternative energy sources.
  2. A major use of foreign oil is in auto fuel, so alternative auto fuels are good goals.
  3. And we've developed one: we mix ethanol with gasoline.
  4. We make ethanol from corn. Domestically. It doesn't come from foreign countries.
  5. Of course, because there's now a demand for corn to make ethanol the supply of corn for other uses is reduced, which drives up the price of corn.
  6. We use corn to feed dairy cattle.
  7. The cost of feeding a herd of dairy cattle goes up, therefore...
  8. ...the cost of producing milk goes up, and the farmers' other costs have not gone down. They have to make up the difference.
  9. The retail price of milk goes up.
Q.E.D.

It's too bad we can't pour auto fuel on our breakfast cereal, but I guess it's a good thing that our cars don't run on milk.

6 comments:

Michelle said...

I'm sure evolution can be blamed somehow..

douglikespatti said...

That's bullshit. The "waste corn" after all the sugars have been wrung out of it from making ethanol make a GREAT cattle feed.

-- a hick from SD

douglikespatti said...

Posted a little soon. Check out the Wikipedia article on ethanol:
http://en.wikipedia.org/wiki/Ethanol

Granted - there are other problems with fueling our cars with ethanol, but this particular argument is specious.

-- not really a hick from SD

Barry Leiba said...

What argument?
I was just explaining why they're saying that the milk prices are going up. I'm not saying that we shouldn't use ethanol to fuel cars. Quite the contrary — I'm fully in favour of it.

Barry Leiba said...

Further clarification: I guess one of the points here is that everything is connected. Changing anything changes other things, often in unanticipated ways.

douglikespatti said...

I completely agree that change has unintended consequences and I didn't mean to indicate that I was attacking you. It seems my choice of words was pretty bad (it's not really an argument). The reasoning given by the radio personality is flawed. It's _more_ likely the cost of milk has gone up because the cost of fuel (diesel fuel to transport the milk) has gone up.

I'm not a big fan of ethanol (even though it's a boon for my state) because it's not really a solution to the fuel problem. Not the "dependence on foreign oil" fuel problem, the "we are consuming fuel at an unsustainable pace" fuel problem. I'm not suggesting we dismiss ethanol as a fuel source completely, it could be a "step" along the way. It just seems that it is being "sold" as the solution to our fuel problems.

-- Chad in SD