Ag & Energy - Lesson 19 - Biofuels Impact on Corn Supply

Author

Will Fett

Published

6/11/2014

Ag & Energy - Lesson 19 - Biofuels Impact on Corn Supply

Topics:

Lesson Plans - 9th - 12th

Target Grade Level / Age Range:

High School: 9-12

Time:

90 Minutes

Purpose:

As a result of this lesson, the student will …

Describe how ethanol creates value-added markets for farmers.
Recognize that ethanol production does not reduce the amount of food available for human consumption.
Discuss the impact increasing corn prices have on feed and food prices.

Materials:

Writing surface
Projector
Packet of Kool-Aid
One cup of sugar
Pitcher
Water

Suggested Companion Resources

Background – Agricultural Connections

Before completing this lesson and understanding how ethanol might have an effect on corn, it is important to understand how corn is utilized throughout the U.S. food system, the livestock feed system, and the many industrial uses that corn has. See the corn utilization poster from Iowa State University to discover how many products corn is used in. http://www.ccur.iastate.edu/education/posters.html

When discussing biodiesel and potential impact on the soybean supply, it is important to understand how widespread soybeans are in the food and fuel system. See the soybean utilization poster from Iowa State University to discover how many products soybeans are used in. http://www.ccur.iastate.edu/education/posters.html

Interest Approach or Motivator

Distribute the worksheet to students. Have students brainstorm how they think ethanol affects the economy, livestock feed prices and human food prices. Give students two minutes to work individually and write as many ways that they can think about how ethanol production might impact each of these three areas. Encourage them to think about how ethanol would impact the economy, livestock feed prices, and human food prices. Encourage them to come up with at least one item in each column. Give the students two minutes, and during this time, monitor their progress. It will be important that you are providing some hints if the students are struggling.

Now have them locate a partner, share what they wrote on their handout, and try to come up with at least two more for each column. Give them three minutes to complete this task. Again, while students are completing this portion, monitor their progress. You will want to make sure they are staying on task and identifying at least two more ideas for each column. When time is up or most students have finished, process this activity as a class.

Allow students to share their responses with the whole class.

Procedures

OBJECTIVE 1. Describe how ethanol creates value-added markets for farmers.

Ethanol adds value to the corn market for farmers. What does that mean? Allow students to share their ideas. Next, provide students with a quick visualization about the concept of value- added products using a packet of Kool-Aid, one cup of sugar, water, and a pitcher. Discuss the value of each of the ingredients separately, and then discuss their value when they are mixed together. The goal is to help the students understand the concept of “value-added” and then relate it to ethanol.

Here is a packet of unmixed Kool-Aid. Its approximate value is 25 cents. We will also need one cup of sugar which costs another 25 cents. Let’s say that the water used to make the Kool-Aid is one cent. When the price of the individual ingredients is totaled together it is 51 cents for one pitcher of Kool-Aid.

Simply put, value-added means a product has more value because there are more uses for that product.

By processing these ingredients and marketing them together, they become “value-added.” A pitcher of Kool-Aid may bring $3 when marketed at 25 cents per cup. Because the products had more than one use, they created more profit. The same applies to ethanol. The ethanol industry creates many value-added markets for farmers.

Have students capture the following information into their notes and discuss each point as it is presented.

Ethanol creates value-added markets for America’s farmers, stimulating rural economies by increasing corn prices and rural income.
1. The increase in farm expenditures and employment opportunities in the ethanol industry is projected to increase annually due to additional ethanol production and use. Farmers are realizing the added benefits of the ethanol industry through ownership of manufacturing plants.
2. Ethanol production creates domestic markets for corn and adds four to six cents a bushel for each 100 million bushels used. Better prices mean less reliance on government subsidy programs and more income and independence for farmers.
3. Ethanol production will help increase net farm income more than $6.6 billion over the next 15 years.
4. Ethanol production consumed 5.1 billion bushels bushels of corn in 2014.
5. Ethanol production uses about 36 percent of the nation’s corn crop.
6. The partial tax exemption for ethanol blend fuels creates jobs (290,000), stimulates economic activity ($44 billion GDP), and reduces the U.S. trade imbalance.
7. Ethanol production adds more than $8 billion to federal, state, and local tax receipts.
8. Each 100 million bushel increase in the demand for corn results in a corn price increase of 4 to 6 cents per bushel.

Ethanol can accounts for 14 cents of the value of every bushel of corn marketed by American farmers.

It becomes pretty clear that ethanol adds value to the corn industry, but corn producers are not the only ones that gain from ethanol production. The communities in which ethanol plants are located receive many benefits as well.

Even though the benefits of ethanol are somewhat obvious, there are still several myths out there about ethanol production. Let’s examine a few of those myths.

OBJECTIVE 2. Recognize that ethanol production does not reduce the amount of food available for human consumption.

What do we use corn for besides ethanol production? Allow students to share their responses. We use corn for many different purposes, but will ethanol production really impact our food supply? Does it affect the corn-based products we purchase?

Pass out copies of the corn utilization poster. Have students draw a star next to the ethanol products (fuel ethanol, engine fuel, industrial alcohols, fuel octane enhancers, oxygenate in engine fuels). Using what they already know about by-products, ask students to draw a circle around those by-products (DDGs, livestock feed, amino acids, cooking oil, industrial starches et al.)

Ethanol critics point out that ethanol production is using too much of our corn supply and that it is decreasing the amount of food humans have for consumption. That is definitely not the case. Let’s see how ethanol production impacts feed and food prices.

Biodiesel can be made from a variety of products, but soybeans are most commonly used in the Midwest. What impact does the use of soybeans for fuel have on the supply of soybeans for food? Pass out copies of the soybean utilization poster. Have students draw a star next to biodiesel. How does biodiesel compare to other uses of soybeans?

Objective 3. Discuss the impact increasing corn prices have on feed and food prices.

Share with students the story called the “Tortilla Crisis.” Show the information to the students, and after they have read the story help the students brainstorm why this problem might have occurred. Follow these steps to complete the activity:

Establish the two roles each student will play. Explain that when the students are the expert they stand tall and take on the air of an expert (a know-it-all with a pleasant personality). When they are the interviewer students address an imaginary camera, with microphone (pen) in hand, and welcome the viewing audience to “Moments with Dr. (fill in the student’s name).” Then they pose questions to the expert about the “tortilla crisis” story. For example: Facing the camera: Welcome to our show. Today we are interviewing the world renowned expert in corn tortilla production, Dr. Seth Smith. Turning to the expert: Please tell us, Dr. Seth, why is this crisis so important? Point the microphone in the direction of the expert. Note: This activity works best when students generate appropriate questions prior to the interview.
Establish the process. Explain that this activity is to aid in the topic. Share that the power lies in how well students can play the roles and use the information they just learned. It is a timed event and they will switch roles midway through the event. Note: The time allocated is dependent upon the amount of content students will be rehearsing. An average time limit is three to five minutes, switching roles midway through.
Have students stand, pair up, and get ready to go “live” at your signal.
Switch roles. Midway through, get everyone’s attention. Students now switch roles. Note: The new expert usually picks up from where the other left off. If the first expert covered all the information, then the new expert simply starts at the beginning.
Conclude the activity. After everyone has played both roles at least once, students acknowledge each other with “Thank you!” You can now randomly select individuals to share what their expert said as a way to check for understanding and increasing individual accountability for the content.

There is a “Tortilla Crisis” in Mexico! Much of the corn used in Mexico is imported from the United States and used to make tortillas. Tortillas have long been an inexpensive, but nutritious staple food for low-income families in Mexico. Tortillas are made from white corn, which is not a type of corn used to produce ethanol. The problem is that many farmers are switching from white corn to yellow corn (the type used to produce ethanol) because of the high market prices. This, in turn, is leading to higher prices of white corn, causing tortilla prices to double over the past few months. This sharp increase in price is making tortillas inaccessible to many families .

Display the following information. Have the students write the information in their notes.

The increase in the cost of corn will lead to the increase in the cost of products produced from corn.
1. Corn is used in the feed of cattle, poultry and pork, the sources of the most widely consumed meat types. The heightened cost of feeding this livestock will lead to an increase in meat costs for meat consumers.
  1. Every 56-pound bushel of corn used in the dry mill ethanol process yields 18 pounds of distiller grains, a good source of energy and protein for livestock and poultry.
  2. A bushel of corn in the wet mill ethanol process creates 13.5 pounds of corn gluten feed and 2.6 pounds of high-protein corn gluten meal, as well as corn oil used in food processing.
2. Farmers switch over to corn due to increase in price, therefore the supply of other traditional crops, such as soybeans, will decrease thus increasing the costs and driving up consumer prices at the grocery store.

While it is important to understand supply and demand, ethanol has not been shown to have a significant effect on consumer food prices. Discuss the graph in the PowerPoint highlighting the corn use and annual food price inflation. Q. Why do food prices continue to decrease when corn use increases? A. Corn production has increased dramatically over the past several years. If supply stays high and outstrips demand, prices will remain low and keep food costs low.

Ethanol production can impact all areas of our lives. It is so critical that we are educated as we determine our beliefs about this topic.

REVIEW/SUMMARY

Have the students create a “top five” list of the five most important pieces of information discussed in this lesson. Give students three minutes to complete this.

Allow students to write and then share with someone next to them when time is up or all have finished. Then allow three or four students to share their ideas with the class.

Answers to Assessment:

Essay:

Increase in farm expenditures, increase in employment opportunities, creates domestic markets for corn, increase tax credits for investors, improved balance of trade. (See objective one for complete list.)
Answers will vary

Essential Files (maps, charts, pictures, or documents)

Extension Activities

Students are to create a “Crisis” based on identifying starch crop products in the grocery store. Each student will pick one item and create a timeline for the development of the crisis. Each timeline event is to be supported with explanation details and data (reasonable though made-up). Next day in class, the crises are interspersed throughout the class and small groups of students develop possible crisis management scenarios. These scenarios are discussed openly in class.
Students can further research the impact of ethanol on the economy and write a speech to deliver to the class.
Invite a representative from the local cooperative to speak to the class about the idea of value-added products. Have students create interview questions to ask the representative prior to class.

Sources/Credits

New materials, updates and revisions were funded in part by a grant from the Iowa Energy Center as a special project of the Iowa Agriculture Literacy Foundation.

Author(s)