A recent study by South Dakota State University concluded that “U.S. farmers converted more than 1.3 million acres of grassland into corn and soybean fields between 2006 and 2011, driven by high crop prices and biofuel mandates.  In states like Iowa and South Dakota, some 5 percent of pasture is turning into cropland each year.”

A number of the study’s conclusions relating to biofuels are fundamentally flawed for several reasons. First, there have been very few ethanol plants built in the U.S. since late 2006. So it seems unlikely that farmers would be rushing to produce more crops for a flat-lined biofuels market. The implication that the biofuels mandate drives up corn prices and thus encourages farmers to bring marginal grasslands into production flies in the face of a recent study by a major U.S. agricultural company, Growmark, that concluded the current rise in crop prices is driven far more by market speculators than the production of biofuels. Finally, it is unreasonable to compare the destruction of the rain forests with the short-term conversion of a small percentage of grasslands to agricultural crops. Grasslands can be grasslands again within a few years; the destruction of the rainforest is measured in centuries. 

In the Midwest, grasslands act as a carbon sink only as long as they are not covered in snow. Crop covering provides a carbon sink for nearly the same amount of time each year as grasslands would. Once the snows come, the carbon sink properties of the plant matter are negligible. 

As the saying goes: “Nothing cures high prices, like high prices.” As normal weather patterns return to the corn-growing regions of the Midwest and more normal corn production ensues, the price will come down. Farmers will only farm more marginal land, and incur the increased expense of doing so, as long as the price of corn and soybeans remain high enough to make it profitable and it is within the scope of existing farm and environmental policy.

While ethanol has taken the brunt of the blame for high corn prices, I'm sure few will heap any praise on the ethanol industry when grain prices return to a more normal level, but rather will find something new to hang on the yoke of this energy workhorse.

So while I greatly respect our friends at SDSU, I would beg to differ with their conclusions that blame ethanol and biodiesel (at least in part) for the destruction of America’s grasslands. Any modest swings in the conversion of grasslands to croplands are nothing more than temporary aberrations of a program the government set in motion over 100 years ago when it opened up the vast prairies of the Midwest to agriculture. 

That’s the way I see it. 

Author: Mike Bryan
Chairman, BBI International
mbryan@bbiinternational.com