I meant to write this up a while ago, and then I happened to see that Dubner over at Freakonomics beat me to the punch.
– Notwithstanding the recent drop, high oil prices have driven a demand for ethanol made from corn.This is basically what I was thinking. Michael Pollan convinced me that most of the cheap unhealthy food Americans eat is based on cheap corn. Not only do you need it for corn sweetener, but also to raise beef. As corn prices go up, so does everything at McDonalds (and the end of the $1 burger). Fruits and vegetables become relatively less expensive and people eat more of them. This all leads to healthier diets (though American's might spend a higher percentage of their income to eat) and skinnier Americans.
– Accordingly, the price of corn is rising fast, with July contracts at $4/bushel, about 60 percent higher than last summer.
– With corn so much more expensive, food manufacturers who use corn in so many forms in so many foods will look for substitutes. As the writer Michael Pollan puts it, “Corn is the keystone species of the industrial food system… If you are what you eat, and especially if you eat industrial food, as 99 percent of Americans do, what you are is corn.”
– Because corn was so cheap for so long, high-fructose corn syrup has become a common substitute for cane sugar. Pollan and others have argued that corn syrup is a great contributor to national obesity.
– Already, one boutique soda company has trumpeted its return to using cane sugar instead of corn syrup. “It’s better for you, it’s better-tasting and, overall, it’s better for the environment,” says the CEO of Jones Soda.
So, as higher oil prices continue to drive demand for corn-based ethanol, which drives the price of corn higher, which makes cheap corn syrup more expensive, which leads food manufacturers to seek out potentially less fattening sweeteners, will Americans get skinnier?
Ethanol, is there anything it can't do?