The high cost of Ethanol - raising pigs
The government subsidizes Ethanol production. This has caused a lot of people to get into the making the stuff and the demand for corn as a feedstock has caused the price of corn to rise substantially. The price of products containing Corn have risen as well.
Raising pigs is one example - from the
Wall Street Journal:
With Corn Prices Rising, Pigs Switch To Fatty Snacks
On the Menus: Trail Mix, Cheese Curls, Tater Tots; Farmer Jones's Ethanol Fix
When Alfred Smith's hogs eat trail mix, they usually shun the Brazil nuts.
"Pigs can be picky eaters," Mr. Smith says, scooping a handful of banana chips, yogurt-covered raisins, dried papaya and cashews from one of the 12 one-ton boxes in his shed. Generally, he says, "they like the sweet stuff."
Mr. Smith is just happy his pigs aren't eating him out of house and home. Growing demand for corn-based ethanol, a biofuel that has surged in popularity over the past year, has pushed up the price of corn, Mr. Smith's main feed, to near-record levels. Because feed represents farms' biggest single cost in raising animals, farmers are serving them a lot of people food, since it can be cheaper.
Besides trail mix, pigs and cattle are downing cookies, licorice, cheese curls, candy bars, french fries, frosted wheat cereal and peanut-butter cups. Some farmers mix chocolate powder with cereal and feed it to baby pigs. "It's kind of like getting Cocoa Puffs," says David Funderburke, a livestock nutritionist at Cape Fear Consulting in Warsaw, N.C., who helps Mr. Smith and other farmers formulate healthy diets for livestock.
California farmers are feeding farm animals grape-skins from vineyards and lemon-pulp from citrus groves. Cattle ranchers in spud-rich Idaho are buying truckloads of uncooked french fries, Tater Tots and hash browns.
In Pennsylvania, farmers are turning to candy bars and snack foods because of the many food manufacturers nearby. Hershey Co. sells farmers waste cocoa and the trimmings from wafers that go into its Kit Kat bars. At Nissin Foods, maker of Top Ramen and Cup Noodles, farmers drive to a Lancaster, Pa., factory and load up on scraps of the squiggly dried noodles, which pile up in bins beneath the assembly line. Hiroshi Kika, a senior manager at the company, says the farm business is "very minor" but helps the company's effort to "do anything to recycle."
Other businesses called "jobbers" serve as middlemen, buying food that manufacturers would otherwise throw away, like burned or broken cookies, or cereal that contains too much sugar, and selling it to livestock operations. At Midwest Ingredients Inc. in Princeville, Ill., manager Ruthi Coats says more farmers are coming to her because, rather than feed corn they grow to livestock, they want to sell it on the market for those big prices.
Ideally, livestock producers like to feed their pigs and cattle a mixture consisting of about 70% corn, plus soybean meal, fat and vitamins. Corn provides protein, essential nutrients and amino acids that give animals energy and fatten them up. Historically, the livestock industry has consumed 60% of the nation's corn crop.
Thanks to the ethanol rush, the price of a bushel of corn for months has hovered around $4 -- nearly double the price of a few years ago. That has prompted livestock groups like the National Cattlemen's Beef Association and the National Chicken Council to call for an end to federal ethanol subsidies, including a 51-cent-per-gallon tax credit offered to companies that blend gasoline with ethanol. For now, livestock must pay up or make do with alternatives.
Emphasis mine -- the subsidy on Ethanol is not well thought out. It needs to go away now. Ethanol costs more to produce than it yields and it is not an alternative energy source, it is an energy sink.
Posted by DaveH at May 21, 2007 11:26 AM