Good news for corn farmers is bad news for dairy farmers, consumers
Cost of dairy operations could impact milk prices
9:38 a.m. Tuesday, April 10, 2007
In two weeks, Wisconsin Farmer David Adams will be planting a lot more corn than usual "because the price of corn looks like it'll be better than wheat or beans," he said.
That's an understatement. Corn prices have almost doubled in the last year thanks to the growing demand for ethanol -- the alternative cleaner fuel made by distilling corn mostly.
Adams is so keen on corn he's converting acreage from different crops.
"That's alfalfa right now. That'll be corn. Then this field here is another 35 acres," Adams said. "It was wheat last year, and it'll be corn also."
Other farmers are doing the same. The Agriculture Department says they'll be planting 15 percent more corn nationwide this year.
And as ethanol distilleries sprout across the Midwest, it's expected that by next year. They'll consume a third of the total U.S. grain crop.
And all of it just in time for the flex-fuel cars Detroit is easing onto showrooms now.
But down on the farm, not everyone is happy.
David Kyle is a dairy farmer.
"I'm sure that they didn't think down the line how the livestock producers will be affected," Kyle said.
He's talking about the fact that as ethanol demand pushes corn prices up, the costs to those who depend on the crop go up too.
In the last year, Kyle's cost for corn feed doubled.
As a result, Kyle said less milk will be produced.
"That's the bottom line," he said.
Milk will cost more this year as a result, along with beef, chicken, turkey and pork at the supermarket.
And if the trend towards ethanol continues...
"What we may see emerge here is a consumer revolt against the use of grain to produce fuel for cars, if it drives up their food prices," said Earth Policy Institute President Lester Brown.
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