As Drought Kills Corn, Farmers Fight Over Ethanol

(a story on North Country Public radio, reprinted at http://www.northcountrypublicradio.org/news/npr/157044950/as-drought-kills-corn-farmers-fight-over-ethanol )

Recently, a coalition of groups representing America’s livestock and chicken farmers delivered an angry attack on the “Renewable Fuel Standard,” which requires gasoline companies to buy a minimum amount of ethanol — 13 billion gallons this year — and blend it into gasoline supplies. The groups released a new study that argues that this ethanol mandate does very little good: It increases the cost of gasoline and makes the country no less dependent on energy imports.

Even worse, the meat producers say, it creates unfair competition for corn. The mandate forces gasoline companies to buy billions of gallons of ethanol that they don’t even want, driving corn prices through the ceiling and potentially forcing livestock producers into bankruptcy.

Our Take:
Let’s turn the situation around. How would livestock producers react if another industry told them who they could sell their product to and who they couldn’t? They’d say, you are standing in the way of out livelihood and making it impossible for us to sustain ourselves economically.

There is no money for government handouts anymore.

If the livestock industry succeeds in sinking RFS and the ethanol industry, farmers won’t raise corn. Period. Because $2 corn, with no government support, is an impossibility.

The same small towns that livestock farmers share with crop farmers will dry up and blow away and we will be buying our food from Chile and Russia. That is, if we can afford to import food. Through the recession, agriculture was a major engine for economic stability.

Iowa State University’s Center for Agricultural Research and Development has had something to say about the question of gas prices. The idea that replacing ten percent of the gasoline market with biofuels has no impact on prices (or that it increases gas prices) is pure hog wash. Or maybe it’s chicken feathers—since the National Chicken Council states that biofuels did not reduce our dependence on foreign oil despite the fact that we now import 49 percent of our energy compared to 60 percent before the rise of the ethanol industry. Yes, many people are driving less or driving more efficient vehicles, but studies show at least half of that reduction in energy imports comes from ethanol use.

The livestock industry knows all this. And when it isn’t under pressure from a temporary price rise, they remember it. In the end, they will get the feed they need. Perhaps this won’t be without pain, and perhaps some producers may exit the business, but livestock production as a whole will continue to thrive as long as there is strong pipeline of crop production to feed their animals. Ethanol is part of what makes that happen because it’s a part of a strong crop production industry.