Biofuels, particularly ethanol fuel, have had plenty of recent hype as a possible homegrown replacement for gasoline. However, biofuel production in the United States is driving up grain prices and possibly harming the environment.
A recent report from the Earth Policy Institute says that grain used for alternative fuel sources in the United States alone exploded from 54 million tons in 2006 to 81 million tons in 2007. This doubled the annual growth in world demand for grain. The report also says that world grain production has failed to meet demand in seven of the last eight years, and using grain in biofuel production is increasing this deficit. Some countries have even restricted or banned grain exports to avoid further rises in domestic food prices. The resulting “agflation” has created record prices for corn, soybeans and wheat.