Corn! Also referred to as yellow gold is a true American success story. Today the
crop dominates the US agricultural sector covering more than 80 million
acres concentrated in an area known as the Corn Belt. In 2018 alone the u.s.
produced about two and a half tons of corn for every man woman and child
living in the states. And yet people in America don't seem to be eating corn for
every meal of every day which raises the question - "Where does all that corn go?". The
easy answer to that is - everywhere, or almost everywhere. You see corn is used
in sodas, processed foods, and burgers (patty bun andn ketchup). It's in fish, makeup,
and medicine. It's in the gas tank of your car and on the walls of your home.
Corn's impact has become so powerful it has shaped other industries which in
turn have become reliant on it for their existence.
What made corn so popular was his versatility and unique properties
combined with advances in technology genetics and farming methods. There is
however a key ingredient which turned corn from an agricultural product into an
industrial engine. Despite its success the crop isn't exactly self-sustaining
with a large portion of every dollar earned by corn farmers being paid by
government subsidies. It is fair to say the today government agricultural policy
is a pillar of the industry but this wasn't always the case.
Government involvement in agriculture evolved over decades with its origins
traced back more than 100 years prompted by the u.s. involvement in a war.
The Great War. As a major food supplier to its allies in war-torn Europe the
u.s. needed to secure food production for the war effort and it did so by
actively encouraging farmers to increase their output. This however was done with
no clear agricultural strategy for the years after the war. The problem with
this policy became evident in the 1930s. The Great Depression which lasted from
1929 to 1939 led to a unique combination of economic turmoil an oversupply of
grain resulting in a significant decline in
agricultural prices. During the same period extensive farming and
overproduction led to severe ecological damage and soil erosion which devastated
land productivity and culminated in severe dust storms in an area which was
nicknamed the Dust Bowl. As a result the government introduced commodity price
and supply controls. In a nutshell the government will purchase any surplus
grain can pay farmers to leave land used in time of oversupply and sell its
stock back in times of low yields in order to reduce agricultural price
volatility. This changed in the 1970s when Earl Butz was the head of the USDA.
He viewed the existing supply policies a socialist and instead actively
encouraged farmers try to get big or get out as well as maximize production by
planting from fence row to fence row. The idea was to lower prices for
agricultural products by encouraging larger size and greater efficiencies in
farms which of course would ultimately benefit food producers and suppliers of
agricultural inputs such as fertilizer pesticides and equipment. In order to
make the policy change more acceptable to farmers who were fearful decreasing
prices Butz suggested that producers would leverage foreign trade in times of
oversupply. The sale of grain to the Soviet Union in 1972 was proof of
concept for that claim. It turned out however that the market was not able to
bear the subsequent increase in production. In the 1980's the increased
supply caused prices to crash resulting in tens of thousands of farms going
bankrupt. The surviving farms had no choice but to increase their output
hoping to make up in volume what they lost on price and there was one crop in
particular which came to dominate the American Landscape
In 2018 the US corn production was estimated at fourteen
point four billion bushels with an average yield of 176 bushels per acre
with a total harvested area spanning 81 million acres most of which is
concentrated in the Heartland region with Iowa in Illinois accounting for a
third of the u.s. crop. The spread of corn is actually not that difficult to
understand. Not only is it easy to grow in different conditions but it turned
out that its byproducts could be used in a wide variety of goods. In addition corn
yields have been growing consistently over the last hundred years making the
crop increasingly more productive than its agricultural rivals. Perhaps somewhat
counter-intuitively the most significant impact of cheap mass-produced corn was
on the meat industry. The declining prices of corn which is used as animal
feed alongside improvements in breeding technology and pharmaceuticals led to
the creation of concentrated animal feeding operations or Cafos where
animals are kept in confined spaces for a period of more than 45 days per year.
From a business perspective Cafos are significantly more efficient than other
livestock operations due to the controlled environment in which the
animals are kept in as well as the economies of scale of those facilities.
As a result meat dairy and eggs are now produced faster and cost less which has
had a positive impact on consumer spending power. If we look at cattle as
an example what Cafos did was essentially transforming the traditional
ranching model where a cow and a calf would graze on grass spread across 1.5
to 2 acres to a model where thanks to the high caloric value of animal feed
hundreds of cows can be gathered within a single acre. This of course
resulted in significant improvements in land use efficiency but it did come at a
cost. Aside from the obvious animal welfare
issues which really deserve a video of their own there are also significant
environmental externalities. Here we're going to focus on one of those in
particular. Typically grass grazing cattle produce and distribute waste over
a large area fertilizing the soil. In Cafos however that waste is
significantly greater and stored in a liquid form in a so
called Lagoon. Those facilities post substantial risks to the Environment and
Public Health as animal waste contains a number of potentially harmful pollutants
such as pathogens, hormones, antibiotics, and chemicals. This is especially
dangerous in case of flooding as lagoons can overflow and release their waste
into the environment which was the case in North Carolina after Hurricane
Florence in 2018. In addition despite the fact that manure is generally beneficial
to agriculture if applied too frequently or in to large a quantity nutrients can
overwhelm the absorptive capacity of the soil and runoff into the groundwater
sources. The effects of this type of oversaturation are visible in the annual
algae bloom at Lake Erie in the dead zone in the Gulf of Mexico extending for
over six thousand nine hundred square miles.
Overall the effect of corn on animal farming has turned the u.s. into one of
the world's largest consumers of animal products this however is not the only
way corn has made it into people's diets. The abundance of cheap corn in the 1980s
coincided with the sugar price increase in the US market resulting from US trade
protectionist policies during the period. Those were the perfect conditions for
the rise of high fructose corn syrup a derivative of corn starch as a
substitute for sugar. Being a liquid and thus not a perfect sugar substitute corn
syrup was still successful uses compatibility with the beverage industry
as Pepsi and coca-cola both embraced the corn derivative which lowered costs for
their products. Today corn syrup is found in most foods with other sugars and is a
very common ingredient in processed foods but the vast majority of people's
intake still comes from soft drinks. Despite accounting for a relatively
small portion of corn production high fructose corn syrup has still managed to
have a significant impact on the US population. Those include an increased
chance of weight gain diabetes and heart disease which are claimed to be caused
by high fructose as it is metabolized differently than other carbs. To
summarize could is actually fair to say that most people do eat corn in some
shape or form as part of their daily diet.
Despite that the largest corn consuming industry has nothing
to do with food. In 2005 the u.s. became the largest producer of ethanol in the
world. This was driven by federal legislation
aimed at reducing the country's oil consumption and enhancing its energy
security. Ethanol is a biofuel and as such it is claimed to be more
environmentally friendly than conventional fossil fuels.
Although true in theory there is scientific evidence arguing that ethanol
is intensifying climate change rather than helping to resolve it.
For starters u.s. ethanol is derived from corn however the energy required
for his distilleries comes mainly from coal.
This makes the sustainability of ethanol highly debatable. And while land is very
good at capturing carbon through growing corn it is not as efficient in producing
energy. Solar cells in fact can produce a hundred times as much energy from the
same acreage as corn ethanol. In addition the ethanol industry consumes about 40%
of all corn produced in the States. This results in a higher demand for corn
which in turn reduces production of other crops and increases food prices.
What is even more bizarre is that the legislation which gave birth to the
ethanol industry is no longer relevant as the US through the help of shale oil
is on its way to become a net exporter of oil and gas. This raises the question
"What is the purpose of the ethanol industry?". This is where politics comes
into the picture. You see Iowa is a swing state meaning it can vote Republican or
Democrat. And it currently has 44 ethanol plants which help support more than
40,000 jobs in the state. Thus voting against ethanol at this
stage is considered as voting against rural America and needless to say in
this current political climate no party is willing to do so. It would thus seem
that the only reason for the existence of the ethanol industry is to support
corn producers at the expense of the rest of the USA.
In the end the success of corn is also its worst quality. Given the industry has
become so large and so deeply integrated in the country's economy, politics, and
way of life it's fair to say that us corn is now too big to fail. As a result
factory farming pollution, corn syrup health risks, and ethanol financial costs
are simply the necessary price to pay to maintain this model.