Biofuel growth drives up feed and food prices
The future biofuel production shows that the demand for arable land will increase.
At present, bioenergy production is not yet a threat to the egg industry, but possible climate change to the end of this century will lead to a fast expansion of the bio-energy industry. That's the view of Dr. Hans-Wilhelm Windhorst, director of the Institute of Spatial Analysis and Planning (ISPA), the University of Vechta, Germany, who spoke at the recent International Egg Commission conference in London.
"After several years of moderate growth rates, biofuel production has begun to increase rapidly. This has resulted in an increasing demand for arable land on which corn and oil crops are cultivated for ethanol refineries and biodiesel plants," he said.
Windhorst added that the future biofuel production in the United States, the European Union, Brazil, China, India, and several other countries in Southeast Asia shows that the demand for arable land will further increase.
"This will lead to higher feed costs for the livestock and poultry industries, but also to higher food costs," he said.
Positive impacts of this trend are that it would:
Reduce the dependence of industrialized countries on oil imports,
Contribute to the protection of the environment and reduce the risk of continuous global warming,
Initiate the development and use of advanced technologies such as "bio-mass to liquid" or "flexible fuel vehicles",
Offer new income possibilities for farmers, and
Create new jobs in the supply industry.
But among the negative impacts, more biofuel production would:
Reduce the available land for food grains and feed production,
Lead to a considerable increase in feed costs for animal production,
Lead to higher food costs,
Initiate a "fight for arable land" which would eventually result in serious land use conflicts in areas with intensive animal production, and
Reduce the area of tropical rain forests and cause ecological problems because of large monocultures.
Bioenergy Production Will Accelerate
Political instability in the Near East, one of the main oil exporting regions of the world, and the fear that oil might be used as a political weapon, as well as the threat of continuous global warming, will further accelerate global bio-energy production, he said.
The projected increase of global ethanol production from 2005 to 2015 will more than double the demand for arable land required for corn, sorghum and other grains in the United States and almost triple the demand in EU member states.
In addition, the demand for arable land needed for biodiesel production would increase by 314% between 2005 and 2010, with the largest increase projected for the EU followed by Malaysia and the United States. In Brazil, the sugar cane area would have to expand by 39% to meet forecast production increases.
After two decades of moderate growth, U.S. ethanol production has expanded quickly since 2000. In 2007, ethanol refineries will use almost one quarter of the corn harvest.
Since 2005 on, similar development has occurred in biodiesel production, although the demand for arable land is still much lower.
Far Reaching Impacts
"The Energy Policy Act of 2005 will have far reaching impacts on the development of biofuel production in the United States," Windhorst said.
According to this law, production will have to be increased from 15.1 billion liters in 2006 to 28.4 billion in 2012. However, in his State of the Union Address, President Bush set a new target of 132 billion liters for 2017, in order to reduce the dependence on fossil fuel imports. Such a dramatic increase in the production of biofuels will result in drastic increases in the production costs for meat, eggs and other foods," he added.
In the EU, biodiesel is still dominating biofuel. In 2005, about 1.2% of total fuel consumption came from biofuels. By 2010 the EU wants to push this figure to 5.75%, by which time, around 7-8% of the arable land in the EU (of 27 countries) would be needed to produce the required corn and oil crops. There is a new target of 20% by 2020, which would require 26-27% of all the arable land. "Such a target is not realistic and could only be reached by using new materials (straw or ligno-cellulose) or new techniques (biomass to liquid)," Windhorst said.
Co-products from biofuel production, such as corn gluten feed and dried distillers grain with solubles from ethanol refineries, and oil crop expellers from biodiesel plants, could be used in the poultry and other livestock industries.
The expected increase in biodiesel production would make more oil crop expellers available, rape and sunflower expellers in Europe, palm oil expellers in Indonesia and Malaysia and soybean expellers in the United States.
"These products can be used in the poultry industry and may, at least, partly compensate for the foreseeable increase in feed costs," he said.
"We will have to decide whether we want to buy the crops produced on our land, in a supermarket or at a filling station, for the land, at least under the climatic conditions of the mid-latitudes, can only be used once," Windhorst said.