You know those little packets of ketchup that come with french fries at a fast-food joint? Imagine if they were delicious. Or maybe you think they are already. The instant I tasted one in Mexico last week, I could tell something was different . Why was this ketchup unusually clear and flavorful? I looked at the ingredients. It’s four things: tomatoes, vinegar, salt, and sugar. The last ingredient is the key. The brand is Heinz, the world leader in this ketchup industry. Look at the same thing in the US and you find the inevitable as the replacement: corn syrup. The same brand, same packaging, in the United States is a different good from what you get in Mexico.
You probably know that it is the same with Coke. Mexican coke uses sugar whereas in the US, apparently uniquely in the world, sugar is replaced by high-fructose corn syrup. Once you become aware of this, the reality sets in. What in the US isn’t made of corn actually? And perhaps this has something to do with the diabetes epidemic and the stunning obesity rate in the US, both of which have soared since the 1990s?
There is a growing awareness that we have a major problem. What is the source of this fixation on putting some variation of corn in everything we make and eat? From an economics perspective, it stems from two main sources.
The US has a mighty import quota for sugar that limits imports to keep the price as high as possible for American consumers. “Imports of sugar into the United States are governed by tariff-rate quotas (TRQs), which allow a certain quantity of sugar to enter the country under a low tariff,” says the USDA. “The USDA establishes the annual quota volumes for each federal fiscal year (beginning October 1) and the U.S. Trade Representative allocates the TRQs among countries.”
As a result, US consumers and producers pay approximately three times the world price of sugar. This discourages its use relative to substitutes. Yes, this is happening to you and me every day, and these price signals have dramatically affected our diets. This is because the decision of producers to use corn syrup instead of sugar in a highly price competitive market makes economic sense.
Try to go without corn syrup for a few days. It’s not easy. It’s true, for example, that Heinz offers a product called Simply Heinz that uses pure sugar, not high-fructose corn syrup. But that product costs nearly $1 more than the standard bottle of ketchup. You are at the grocery aisle. You are price conscious. One bottle costs a dollar less than the other, and the taste difference between the two seems barely discernible.
Only high-end, fussy, conscious consumers go for the high-end product. You can see why people desire to pay less. Prices matter. Central planning has caused this, and massive numbers of American health problems along with it.
Why corn syrup and not honey or some other sweetener? The US government offers a complex and varied panoply of subsidies for agriculture of which corn is the top beneficiary. This is why “corn is the single most important commodity for retail food,” says Richard Volpe, an economist for the USDA. “Corn is either directly or indirectly in about three-quarters of all food consumers buy.”
The American midwest has a new mountain range to compare to the Rockies except that it is made of corn, which is plentiful and vastly cheaper to use for everything than what it replaces, including sugar, animal feed, and even gasoline. This is why, when you go to the store, no matter what food you buy, or think you are buying, you are basically buying corn.
America is the land of history’s most innovative uses of corn. For example, you buy a pie. The crust uses corn oil. The filling uses corn syrup. It seems like a pie but it is basically corn. Once you become aware of this issue, it is actually difficult to find anything that doesn’t use corn as the core of the ingredients. It is sugar substitute. It is oil substitute. It is the thickener. It is everything. Take a look at the fare available in the typical convenience store. It should be called the corn store.
Even the gas. The ethanol mandate came about in 2005 and 2007. It mixes nearly all the gas we can buy with a sticky product now in rather short supply. Of all the government regulations I’ve looked at in detail over the last 15 years, the ethanol mandate is, by far, the worst. There are no grounds on which it is defensible.
I don’t recall much debate in 2005 and 2007 when these draconian laws were imposed in the name of the environment and security. Organizations like the Institute for Energy Research were trying to draw people’s attention to what was taking place, but most people figured this was just some wonky and forgettable concern.
Looking this up and examining the history, it appears that government has been trying to put corn in our gas tanks (and mouths) for decades, even back to the 1960s. There were tax breaks, subsidies, lofty national goals, smiley stickers for executives who publicly backed this nonsense, but none of it took. Finally, our masters brought out the brass knuckles and everyone shaped up, culminating in a coercive mandate imposed a dozen years ago.
Now we are stuck with this de facto mandate that we have to put corn in our gas tanks, all based on the kooky idea that fossil fuels are just too primitive, that we have to mix our gas with a movie-theater treat to make it truly clean and efficient.
But clean and efficient are two things that ethanol is not. The reason your edger and weed whacker don’t fire up in the spring months is most likely due to the presence of corn in the tiny gas tanks. The fuel mixture does not stay durable over time and tends to gum up engines. This is why the store shelves are filled with gas-tank additives of all sorts that did not used to exist. The whole point is to correct for the mess that ethanol makes.
Now let’s look at what’s happened to crops since 2005. The percentage of crops devoted to corn have gone from 24% in 1999 to 30% today, more than 96% of all grains. Meanwhile, the crops devoted to soybeans, hay and wheat have all gone down, thereby increasing feed costs for ranchers and consumers. Again, this is not the market talking. This is not what any actual market players are pushing. This all results from government mandates and subsidies. Government intervention has created corn nation. We feed it to our cars, our animals, ourselves.
Meanwhile, the price index of Illinois farmland has tripled in the same period. Even though every price signal would otherwise indicate to farmers to plant less corn, they plant more. And even though land values all over the U.S. went into a major bust in 2008 and following, Illinois farmland goes up and up. This is a result of government intervention, building artificiality into the system and creating unpredictable distortions.
It almost seems hard to believe. It’s a scandal that government has degraded home appliances, indoor plumbing, paint, cosmetics, gas cans, pies, cokes, candy bars, and ketchup. Yet the ethanol nonsense, and corn subsidies combined with limits on sugar imports, might be the worst of all, because it represents a fundamental attack on the dietary habits of all Americans. Public awareness is growing but, in my experience, most people have no idea what is being done to them.
Meanwhile, researchers have discovered the truth about diet. It’s not about calories. It’s about the quality of food. This is what American agricultural policy is against, and has been for decades. The US government is all about forcing corn on you. It is up to you and me and everyone to resist, in your own interest.
Either that or move to Mexico.