Live by the corn syrup, die by the corn syrup

Can Coca-Cola's corporate woes be blamed on ethanol?

Published February 20, 2007 9:05PM (EST)

Last week, Coca-Cola announced losses of $1.71 billion in the fourth quarter of 2006, and said the company plans to cut 3,500 workers from its payroll. One of the main reasons: rising prices for both the aluminum that goes into its cans and the high-fructose corn syrup that sweetens its soda.

Relief on the aluminum front may already be on the way. Although the cost of aluminum has been surging for years, largely owing to voracious Chinese consumption, since May 2006 prices have begun to drop, partly as a result of a huge ramp-up in domestic Chinese production.

But the corn syrup situation is a bit stickier. Corn syrup prices have spiked upward because of the diversion of corn into ethanol production. Given the Bush administration's continued emphasis on boosting ethanol consumption, the days of dirt-cheap corn syrup may not soon return.

Add the woes of soda pop makers to the food vs. fuel debate. Coca-Cola joins the cattle industry, chicken and pig farmers, and Mexican tortilla consumers in a consortium that is giving ethanol the evil eye. But even if you don't believe that consumption of high-fructose corn syrup is linked to obesity and diabetes and is the unnatural child of corn lobby Satanic forces, one has to wonder whether rising costs for the highly processed sweetener are such a bad thing. If it weren't for the system of sugar subsidies and tariffs that prop up the price of sugar in the United States, there would be plenty of cheap sugar imports to replace all that corn syrup. And eliminating those artificial restrictions on the sugar market would be a boon to farmers of developing nations in the South who desperately need markets for their harvests, if not for the waistlines of those who continue to guzzle non-diet soda beverages.

In a perfect world, our biofuels would be coming from sustainably harvested switchgrass and we'd all be drinking organic fruit juice grown from trees in our backyards. We've got a ways to go on that front. But if the corn-based ethanol gold rush helps break down the agricultural subsidies that work against the interests of the world's poorest farmers, maybe there's a reason to cheer those ethanol prospectors on.


By Andrew Leonard

Andrew Leonard is a staff writer at Salon. On Twitter, @koxinga21.

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