Meanwhile, here in America, the Department of Agriculture reported this week that corn reserves are at their lowest level in nearly two decades. Federal officials, according to the New York Times, say the reserves are down because ethanol producers are buying corn as fast as possible in anticipation of a federal policy allowing the amount of corn-based fuel mixed with gasoline to increase from 10 percent to 15 percent. The price of a bushel of corn has doubled in the face of that demand, going from $3.50 a bushel to more than $7 a bushel, which drives up food prices more generally. "The price of corn affects most food products in supermarkets. It is used to feed the cattle, hogs and chickens that fill the meat case, and is the main ingredient in Cap'n Crunch in the cereal aisle and Doritos in the snack aisle. Turned into corn sweetener, it sweetens most soft drinks," the Times reported. There was no indication in the Times story that those same federal officials will do anything about this situation, but at least they recognize the connection between rising food prices and increasing ethanol production.
Rising corn prices in the United States are mirrored worldwide, thanks to growing demand for biofuels in response to mandates from government officials concerned about "being green." The same thing happened in 2008, but the experts dismissed it as a product of an extremely rare convergence of factors that won't likely be repeated any time soon. But, as Princeton University's Tim Searchinger wrote in The Washington Post, "this 'perfect storm' has re-formed not three years later. We should recognize the ways in which biofuels are driving it." Thus, we are reminded of the Law of Unintended Consequences. American policymakers would do well to stop listening to environmental ideologues and start drinking from the same fountain of common sense that clarified Oettinger's thinking.