This CEO is correct about the food crops for fuel controversy. As a normal consumer, we would have not subsidized the biofuel industry and would have let the free markets rule.

The current biofuels industry as it exists would not have existed without government subsidies.

Could not agree with him more…we would very little more for gas, however, food would be less expensive. The corn could be used to feed livestock and make other food products.

Amen! We should be seeking to end E85 production rather than increase it.

Couldn’t agree more with his statement, however biofuels can also encompass sawgrass and alge. Without the government sponsorship these items would not be getting the level of scrutiny they enjoy currently. It was corn-based ethanol that unleashed research into new areas. The scientists promoting biofuels knew this, they just went for the easy investment to get the capitol to fund their research. Unfortunately our president and his idiot staff only read the part about corn and assumed they would get votes. They assumed correctly but created a bigger, albeit short term problem in the food supply.

Government subsides will be necessary to get the ball rolling since VCs don’t seem to want to invest for long haul, rather they want the fast buck. This is no fast buck solution to this problem.

In this, the CEO of Nestle is absolutely correct. Kit Bond needs to work with his rural Missouri constituants to get them to consider volutarily moving back to corn as food, not corn as fuel. Agribusiness needs incentives to get off the high profits of ethanol production and to get back to growing food to be eaten.

The law of unintended consequences writ large.

Has the diversion of corn production to fuel done much to reduce the cost of fuel? Probably not.

It has certainly, however, driven food prices through the roof.

When politicians get involved in markets and economic policy, they always, ALWAYS make matters worse instead of better.

Just last year, the corn from one area about the size of a football field went into 3,291 hamburgers or 66,713 bowls of corn flakes or 7, 608 pork chops, or even 464 gallons of E85 fuel. In addition to food and fuel, that crop went into paper, textiles, adhesives and more. Multiply those numbers by the nearly 14 million acres of corn produced in Iowa and we’re really talking about meeting demand!
Only 19 cents of your food dollar goes back to Iowa’s farmers. The remaining 80 cents is spent on packaging, energy, transportation, and marketing. Corn plays an important, but small role in the price you see in the checkout lane. The supply of corn going into the retail food industry has not changed in recent years, but rising energy costs have doubled along with world demand for products like milk and meat. In most food products on your grocery store shelves where corn is an ingredient, the corn actually contributes less than a penny to the cost.
Kernel of Truth: There is only 13 cents of corn in a gallon of milk. World demand for milk has increased and has bumped the price. Dairy cattle have the price advantage of using co- products from ethanol production called, Distillers Grains.
Kernel of Truth: Corn contributes only 18 cents to a ¼ hamburger and 31cents to an Iowa pork chop. In Iowa, livestock is still the number one market for our corn.
Kernel of Truth: Soda contains just 3.5 cents of corn based sweetner in a liter. High fructose corn syrup takes up only 7% of our total corn production. Though a major ingredient in soft drinks, it is used in small amounts in most other products.
Kernel of Truth: 11 cents worth of corn can be found in your morning cereal. Most of our corn crop is used to feed livestock or ethanol plants. For example, one bushel of corn produces thirty-eight 12 oz. boxes.
Kernel of Truth: 28 cents worth of corn goes into the production of each dozen of eggs. Iowa is number one in corn production, number one in pork production, and number one in egg production. Being located close to where corn is grown gives egg producers an advantage when looking at feed supplies.
Kernel of Truth: Ethanol production in Iowa creates priceless clean air, new jobs, rural economic activity, and lower fuel costs (45 cents per gallon!) Not bad when you consider you are saving the environment, fueling the economy in Iowa, and keeping our fuel dollars in the U.S.
*prices based on current corn prices as of 1-2008.

Thank you Kevin, for that press release from the Farm Bureau (an unbiased source).

hmmmmm…..too bad Mr. Brabeck does not have equal concern of Nestle’s bottled water impact on the planet… which certainly does not do anything positive for the environment…Nestle is huge in the bottled water industry (check the fine print on your bottles as they bottle it under numerous names). What about all the landfills we’re filling with plastic….and the fuels we they use to transport bottled water all over the planet…..and consumers who pay as much for bottled water as gasoline. (same for Big Bucks Coffee!) Turn on the tap water and save the energy used to produce the plastic, the fuel to transport it, and help sustain our planet’s resources from the trash it creates. Bottled water has no redeeming values in a land where pure drinking water is readily available. Nestle is overall a well intended company…however Mr. Brabeck tends to be a bit pompous and “preachy…” I suspect the true cost of bottled water world-wide is grossly understated…it is transparently eating up resources far greater than buring corn fuel.

I also wonder how large of a carbon footprint his huge house, personal jets and many cars in Switzerland leaves? If we all lived as he and Al Gore, the planet’s temperature would rise 20 degrees or more.

Oh, by the way I agree with his views on ethanol….we are truly fools to think it has and / or will help us. Thank you Peter, now go climb another mountain in the Alps whilst I ride my bike to work,live on $32,000 a year and drink tap water. Maybe the WSJ (or the Post-Dispatch) should do a story on what bottled water really costs in terms of energy and help me understand it’s redeeming “sustainable” values. Who in the hell ever thought people would pay $1.00 or MORE for a bottle of WATER — yes WATER!
Think about it…..

Darn Mr. hmmmmmm……I never knew bottled water was such a big part of Nestle until I viewed their website….and also the number of different brands they fill and sell. Never thought about the energy and resources required to make the finished product (water!) not to mention the transportation / fuel costs of moving it from the plants to distributions centers to stores, etc. I agree I get a little tired of the fat cats telling us what we are doing wrong when they live high on the hog and reap millions of dollars in “salary” providing products that help diminish the world in which we try to live. Live simple; be happy. Our own American Mr. Al Gore’s personal energy usage and carbon footprint is disgraceful while he openly preaches what “we” need to do. He should try living my life in rural Illinois scratching out a living the best I can in a two bedroom ranch — then and only then can he tell the rest of the world to save the planet.