June 9, 2009

Collin Peterson Giveth and Collin Peterson Taketh Away
Marion Nestle ran across a chart that shows the recent sharp rise in sales of "HFCS-free" foods (i.e. foods that use sugar instead). HFCS is in the midst of bad run over its health impact vs. sugar (probably overstated) as well as over the new research suggesting it can be contaminated with trace amounts of mercury. But Nestle goes a step farther and links the recent sales increase for plain old sugar-sweetened products to the current ethanol craze.

That's right. The same boondoggle that's threatening to derail the Waxman/Markey climate change bill is also depressing sales of HFCS. Why would that be? Well, the bad press may have provided the motive for food companies to make the move back to sugar, but it was price that gave them the opportunity. To this point, sugar tariffs have kept sugar prices in the US artificially high. But now with corn prices having moved up to a new plateau, food companies can use more sugar without taking much of a hit to their bottom line (that's reserved for the HFCS refiners).

Of course, there are those who blame high corn prices on the explosive growth in meat production rather than in biofuels, and that's true to some extent. But when you look at charts of total domestic corn use, the slope of the ethanol curve is astonishing. This USDA chart has historical use data through 2009 and estimated use data for later years. Note that the steep climb in corn use for ethanol lies in the historical rather than in the estimated data.

Feed use has indeed been slowly creeping up, but over a longer period and with some bumps. But it's hard to argue with Marion's point about ethanol when you see that massive spike in corn use for ethanol after 2005. So, thanks, Rep. Peterson. Your love for all things ethanol has really put the hurt on HFCS. But at the end of the day, it's important to remember that sugar is no better for anyone's health -- you shouldn't be eating processed food with either. The fact that food companies are still forcing tremendous amounts of sweeteners down our throats makes it hard to cheer too loudly over this "win."

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