Another Effect of the Ethanol Boom

We’ve talked about this before, about how a raise in the corn prices have a ripple effect that affects products that rely on corn later on downstream. Now comes another of these stories, this time the “victim” of the higher corn prices is the meat industry.

Higher corn prices mean higher feed costs for cattle, hog and chicken producers. Some ranchers are having a harder time securing grazing land, or are paying higher rents, as farmers convert acres to corn.

The result: one of the bigger shoot-’em-ups between growers and ranchers since the 1800s, when farmers fenced in the open range. Rather than firearms, the weapons of choice this time are lobbyists and dueling economic studies.

“Where is our feed going to come from, what is going to happen to our competitive position internationally?” asks Jesse Sevcik of the American Meat Institute, noting that the livestock sector is losing its position to ethanol as the main consumer of U.S. corn.

I’m not a fan of ethanol, but I’m hardly in a position to speak with any authority on energy issues.

That being said, I’m still in shock that no one in a position authority thought about what would happen to the food industry while the government was planning on getting behind the corn industry. Sometimes I’m too naive for my own good.