Biofuel demand impacting non-GMO and organic production

The demand for biofuels, particularly corn ethanol, is impacting production of non-GMO and organic grains. The increased production of corn for ethanol is reducing acres of, and increasing premiums for, non-GM soy, reducing organic land conversion, increasing GMO contamination risks, and raising food and feed prices. Meanwhile, there are doubts about the long-term viability and sustainability of corn ethanol as an alternative fuel.

Mary-Howell Martens, owner of New York-based Lakeview Organic Grains, sees a chain reaction of challenges to organic agriculture caused by the increased production of corn for ethanol. “When the market for one commodity changes as rapidly as it has for conventional corn due to ethanol, the markets for other commodities also swing wildly with helpless farmers often caught in between,” she says.

Impact on organic dairy
As an example, Martens says that farmers who may have wanted to transition their land to organic are less willing to take the risk because they can earn high prices growing conventional corn. “This has resulted in only a 7-8% increase in organic grain production coming at a time when we’re experiencing an over 50% increase in organic animal production,” she says. “This huge disruption in supply and demand has driven organic grain prices through the roof.”

Higher organic feed grain prices have forced many Northeast US organic dairy farmers to plan to sell their cows on the conventional market to cut expenses, says Martens.

The end result is a situation where “organic milk prices have to go up, grain prices have to come down, or organic dairy farmers will go out,” says Martens.

“Ethanol tsunami”
Bob Turnbull, extension specialist at Iowa State University, also says that the higher corn prices, along with high land prices and US government subsidies for ethanol, are combining to slow the number of farms transitioning to organic production.

Brad Brummond, organic crop specialist with the North Dakota State University extension service, says the ethanol boom is impacting all farmers, not just organic. “All grains have to compete for acres that are dedicated to corn. I can't think of a crop grown in North Dakota that has not been affected,” he says.

Jennifer Tesch, marketing manager, SK Food International, says the biofuel boom with higher corn prices is increasing competition between acres for food and for fuel. “There are a limited number of acres available with many of those acres being used for fuel,” she says.

However, she doesn’t see much impact on organic production. “I think this is primarily on the conventional side and less on the organic side, as we have not seen direct impact on the organic markets,” she says.

Impact on non-GMO production
Producers of non-GM soy are especially feeling the impact, says Maynard Kropf of Prairie Hybrids, which supplies non-GM and organic corn and soybean seed. “We couldn’t contract enough acres of soybeans because farmers were growing corn,” he says.

Kropf says the ethanol boom with high corn prices is encouraging farmers to plant more corn.

Another impact on non-GM acreage is that farmers will need higher premiums to grow non-GMO. “Non-GMO, IP specialty, and organics will have to increase premiums to keep acreage because of pricing push and special handling,” says Steve Chambers, president, Montana Specialty Mills.

Lon Baldus, owner of non-GMO supplier Meadowland Soy, is also concerned about competition from other soybean producing nations. However, he believes biofuels have boosted the US farm economy and balanced the non-GM soy market. “We had an oversupply of non-GM soybeans in 2006 that carried over into 2007,” he says. “Having fewer acres for non-GMO crops is not a bad thing because you won’t have everybody trying to flood a market where buyers aren’t taking and producers cannot sell for the premiums they deserve.”

Brummond sees the high price for conventional corn as a good thing for producers of non-GMO and organic corn. “I think the high conventional prices will bring the organic and non- GMO corn with it and give our organic growers some of the best prices they have seen in years,” he says.

Other challenges
Ann Clark, associate professor, plant agriculture, University of Guelph, sees greater risks of contamination from increased acres of GM corn varieties grown for ethanol. “Demand for ethanol is already converting farmland to corn that formerly was hay or pasture,” she says. “The impossibility of containment of GM pollen means greater exposure to contaminating pollen for neighbors.”

Turnbull says that more disease and pest problems will result if farmers plant corn year after year, instead of rotating different crops, such as soybeans.

Then there are environmental impacts. According to a recent report, increased corn plantings in 2007, which totaled 92 million acres, were responsible for expanding the “dead zone” in the Gulf of Mexico. Each year, nitrogen fertilizer from Midwestern cornfields runs off into the Mississippi River and ends up in the Gulf of Mexico where it depletes oxygen, killing fish and other marine life.

Clark says production of ethanol from corn releases large amounts of nitrous oxide, a greenhouse gas that is 300 times more potent than carbon dioxide.
Bill Lashmett, president, Farm for Profit, also sees problems with ethanol. “In time, we will prove that ethanol production will cause more problems. We are getting more (chemical) run-off, depleted soils, and polluted waterways. It’s a darn crime,” he says.

“Era of cheap energy is over”
While he doesn’t dismiss ethanol as an alternative, Fred Kirschenmann, distinguished fellow at the Leopold Center for Sustainable Agriculture, says research should focus on finding efficient and ecologically-sound fuel alternatives.

He sees problems with the assumption that ethanol and other biofuels will solve our energy needs. “We seem to think that ethanol and cellulosic ethanol will replace fossil fuels, and life will continue as before. That is pure fantasy. The reality is that the era of cheap energy is over.”

As fossil fuel reserves are depleted, there will need to be a transition from stored concentrated energy to what Kirschenmann calls an “energy exchange system.”

“The main question to ask is ‘how do we become part of nature’s energy system?’” says Kirschenmann. “If we put half of our resources to research these systems, we would find a balance to move to an energy future that meets our needs and maintains a good quality of life.”