I am aware of how animals are raised and fed and sold, because I have raised and fed and sold them. You are not aware that selling a farm animal at auction is a common enough occurrence that they advertise on the local radio where I grew up and made yourself out to be an absolute ignoramus on the subject, going so far as to asininely suggest that I learned about farming from the ubiquitous radio spot about the Farmer's Market and Auction.
Yes, a fatty hog is not preferred over a lean hog, but the hog is sold BY THE POUND.
A low carb diet pig may be the leanest pig in town, but he is not going to sell as well as his high carb fat brother who, thanks to a high fat, high protein, high carbohydrate diet is going to weigh twice as much.
And arguments over the efficiency of ethanol, and how “nothing is wasted” (a ludicrous position) are de facto arguments for the mandate of its use and the 8 billion a year in subsidies. Because without mandating its use, it wouldn't be used, and without subsidizing its cost, it wouldn't be sold.
That should be obvious even to you.
Let me try to explain one more time and then we can go our separate ways: all hogs don't sell for the same price per pound.
A contract which is basis the CBOT, for instance requires delivery of a lean hog at between 230 to 260 lbs. Any hog over 260 lbs, but not more than 280 lbs, sells at a discount, while any hog over 280 is out of contract and can't be sold at all. Hogs which are out of CBOT contract are the sort of distressed animals which are then delivered to auction to fetch whatever they can. At auction, all hogs are assumed to be short, fat hogs (as opposed to the long, lean hogs under the contract terms) and are priced accordingly. This is why your father in law complains about the low price of hogs at auction while the price of lean hogs is at a record high.
Sometime if you're interested, you can review the USDOT daily hog reports. These reports breakdown the sale price of hogs based upon a number of factors, but most prominently carcass characteristic. Today's report for the eastern corn belt shows hogs with .4 inch of back fat selling at between $80.88 - 89.01 per cwt. Hogs with an extra inch of back fat sold for between $62.38 - 78.01.