I know you have all heard "what goes around comes around." This is certainly true of the ethanol/corn/food dilemma we are facing at the present time.
True scenario - The federal government is taking corn to make ethanol to help lower the cost of fuel. Has it really helped? I think not. The price of fuel has risen 29 percent this past year and is going higher. Have your wages increased that much? I know my retirement annuity has not. What the corn/ethanol situation has done has made our food costs and our costs of living go higher and higher.
The government's (so-called) smart move to use corn for ethanol, has increased the cost of feed grains for our dairy cows and other livestock. This in turn, has dramatically increased the cost of milk, butter, cheese, eggs, meat, bread, and yes - even our corn flakes. Some of our wheat, alfalfa, and other farm land have been planted into corn for ethanol production.
Corn has increased in price and wheat has tripled. Wheat has recently been as high as $13.19 per bushel. In September 2007, the average price of wheat was $6.75 and in January of 2007, wheat averaged $4.53 per bushel. No wonder the cost of flour and bread have sky rocketed.
Many of our countries feedlots are not full, due in part to the lack of and high costs of corn and wheat. Cattle producers cannot afford to feed livestock because of high feed costs. Also, cattle are being fed a shorter length of time in the feedlots because of high costs, and in time, this will eventually result in a slight decline of quality meat for consumers.
Pork, which has been relatively cheap, is seeing production drop as hog producers cannot afford the $6 plus price of corn and other grains. Julie Pence of Ag Weekly reports that a barley/ethanol plant near Burhl, Idaho, is being planned for 2009. If the barley/ethanol situation has the same effect as the corn/ethanol did, we can look for even higher livestock feed costs, which will lead to even higher food costs for you and me.
The school lunch programs are even being hit-hard by higher food prices and are now serving less nutritious meals than they once were. Ellen Simon of the Associated Press says "the U.S. is wrestling with the worst food inflation in 17 years and analysts expect it to get even worse."
Some trucking companies are going out of business because they cannot afford the costs of fuel. Some livestock producers are having difficulty getting their animals to slaughter plants due to the high price of fuel and lack of trucks.
Two last, important facts:
Don't lay blame for higher food prices on the farmers. The Western Livestock Journal reports that in the mid-1970s, farmers received about one-third of the consumer's food dollar. The agriculture statistics department reports that in 2008, farmers are receiving only 22 percent of the food dollar. In other words, when you spend $100 at the grocery store, the farmer's share is only $22.
My thoughts and Western Livestock Journal Editor, Pete Crow, are somewhat similar. When the government mandated the production of biofuels, it doubled fuel costs and skyrocketed food costs.
Let's face it - we believe that ethanol is evil and the feds should slow down their biofuel binge.
Yes, many believe that Congress rushed into renewable fuels (ethanol) with their eyes "wide shut." They did not realize the impact to the food industry and to our pocket books.
n Wallace Peterson is an Extension Livestock Specialist Emeritus
and a former Gardnerville resident.
