Posted on 06/24/2007 10:10:56 AM PDT by Dan Evans
LUBBOCK, Texas — Motorists might save a few cents a gallon filling their tanks with ethanol, but they could soon be paying more for a burger and a milkshake as a result.
Demand for corn to make ethanol is soaring and so are the prices, which have more than doubled in the past year. That’s bad news for beef and dairy producers who depend on grain to feed their herds. Many say the cost will be passed on to consumers in the form of higher grocery bills this year.
“There’s a lot of concern among cattle feeders,’’ said Jim Gill, market director for Amarillo-based Texas Cattle Feeders Association. “It’s not a moneymaking proposition right now.’’
Cattle feedyards like the one Kyle Williams manages in Texas, the nation’s leading cattle-producing state, is one of the first stops on the road to higher beef prices.
About a quarter of the 30,000 animals at Lubbock Feeders were bought before corn prices began to soar steadily and the added cost was not factored into the price. Williams knows he’ll lose money when it’s time to sell.
Corn costs went from $4 per 100 pounds last June to about $8.50 per 100 pounds this month, Gill said. Cattle feeders are losing as much as $100 per head because of the higher prices, he said.
By December, corn costs could push the already high beef prices consumers are paying even higher, Gill said.
The U.S. Department of Agriculture reported that the average price for choice beef in May was already the second highest on record at nearly $4.30 per pound, just a couple of pennies under the record set in November 2003.
Cattle feeders and producers are not the only ones complaining about higher corn prices. Dairy farmers also are feeling the pinch.
“As more acres go into corn it takes out other forages,’’ Canton dairy farmer Scott Ortiz said.
Farmers who once grew forage crops like alfalfa, milo or grain sorghum are switching to corn, so there are fewer forage crops to feed dairy cows, said John Cowan, executive director of the Texas Association of Dairymen.
Milk prices are expected to continue climbing because of higher transportation costs and the increased demand for corn.
I own Potash of Saskatchewan stock...they just split 2 for 1....
No kidding. Deer corn at Walmart jumped from $4.00 per 40-lb bag a year ago to $5.77 this week. Looks like venison is going to be more expensive too.
One of the biggest is ADM. They have given millions in cash to politicians.
>What a plan. Make a few bucks off the ruination of America
Stupid reply. Grow up.
LOL. Higher corn commodity prices as “conspiracy theory kook stuff.” My trader friends at the Chicago Merc will be rolling on the floor when I tell them.
How "independent" are we going to be if we have to start importing half our food from other countries?
I suspect the professional traders have already factored in tight supplies. The time to go long on corn futures would have been 6 months ago.
It’s going to get much worse. The western end of the corn belt, from Kansas to the Dakotas, and much of Iowa, are drowning in excess rain, and many acres haven’t been planted to corn this year. Some areas may not even dry out in time to plant soybeans. The other end of the belt—the southeast and mid-atlantic states—are suffering from a severe drought. It wouldn’t surprise me to see corn at $7.50/bushel by October.
We could drill for oil in a lot of places but state and federal politicians won't allow it. But they can mandate that we burn food.
Drop in the bucket. - all of this isn’t worth snot to such a concept.
Develop nuclear energy in every locale in America, drill aggressively in America, tax incentives for twice as many refineries right here and make a real difference.... - or do this face saving uber expensive showcasing that won’t - do - spit.
And just why will we be doing that?
Tell me what is smart about investing in corruption of the economy? It makes as much sense as shorting airline stocks before 9/11.
Ethanol is a JOKE. It takes 140 gallons of fossil fuel to produce 300 galons on ethonal fuel. The aquifer depletion for corn is criminal. For equivalent milage compared to gasoline this crap is $10.47 a gallon !!!!!
Now we factor in the higher prices for your food and it is over. The ethonal refineries can’t evrn cash flow with HUGE subsidies.
We need oil!!! We need refineries, We need to raise hell. Drill off shore— Drill Alaska. Get that oil in IRAQ but by God get me to work!!!
In order to grow enough food for fuel to make a dent in our crude imports, we will need to use about half our farm land. It is starting to happen now and food prices are already starting to rise, not just in America but world-wide.
And I guess you have a respectable source for all...that?
Stupid reply.
Tell me what is smart about investing in corruption of the economy? It makes as much sense as shorting airline stocks before 9/11.
I would suggest you get Thomas Sowells book ‘Basic Economics’
and educate yourself on the workings of the free market. With a basic understanding of supply and demand, most people could see this coming from MILES away.
Hay is also going up fast. More acres are being taken out of hay production and being put into corn production because of the lure of Ethanol. Never mind that the farmer has lots more prep work on the production of corn, and only ONE crop a year. More trips up and down the field cultivating, etc. Hay can produce 3-5 crops a year in the same time period.
Wait until the cities find out how much water corn takes for ONE crop/season.
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