The Top of the Economic Food: Chain Oil vs. Corn

Oil is at the top - the highest desired commodity that everyone wants and needs and is scarse enough and hard enough to get that prices can go up and people have very little they can do except pay it... and keeping the prices low has become a huge source of strife for the entire world as nations fight to maintain control over this resource.

And because oil is the top source of energy, when oil prices go up, so does virtually everything else that requires energy to be created or transported.

Corn is closing in on Oil because ethonal made from corn is starting to replace Oil as a means for energy, BUT it's still used for feeding people and the animals who feed people. As people who make ethonal buy up the corn, they can afford to pay higher prices because people are USED to paying more for energy and aren't going to demand lower prices. But the people who feed people are dealing with a comodity that everyone is used to being very low in price, and for which there are alternatives (eating other things) so when they raise their prices, people eat other things.

The result is that our food sources are going to start drying up if ethanol is selected as an alternative to oil.

It's already causing a big problem in China, as their economy is doing better and more people are eating pork, at the same time the prices are rising because of a shortage of pigs as farmers simply can't afford the feed.

And because pigs eat corn and pork is a staple in the diet of Chinese workers who make American goods... well, you get the picture.

Rise in China’s Pork Prices Signals End to Cheap Output

The crisis over pork prices in China, like the jolt many Americans feel when gasoline prices jump, offers one example of how prices can suddenly soar. The Chinese government is struggling to cope — including deliberating whether to sell a snuffling, smelly strategic reserve of hundreds of thousands of live pigs kept at special subsidized farms for precisely the shortage the country is now facing.

Chinese officials offer several reasons for the high pig prices. The cost of animal feed has risen by one-quarter in the last year, partly because more corn is being made into ethanol and partly because more prosperous workers are eating more meat, which requires more animal feed.

Pork is a critical source of protein for Chinese of all incomes, but particularly for low-income workers like those who keep American and European families well supplied with $49 DVD players and other popular consumer products.

If there isn't some sort of top down change (meaning using something besides ethnaol or using something besides corn to make ethanol) there are several different possiblities of how this is all going to play out. People and animals will have to start eating something besides corn, more people will have to start growing corn to meet the supply, the prohibitive cost of trinkets from China will make buying them more expensive and people will stop hording junk and spewing it into landfills, people will stop feeling a need to travel so much and communities will become more inner focused....

Thoser are just a few possibilities. It'll be interesting to see what will really happen, but I know how it's going to happen in my book and I find these kinds of things really fascinating... ;)