Ethanol's demand for corn raising meat prices

by Editor fleischwirtschaft.com
Tuesday, March 20, 2007

USDA indicated in a report that the ethanol industry's robust demand for corn is elevating the cost of livestock and will hike prices for beef, pork and chicken.

The U.S. Department of Agriculture (USDA) says ethanol is consuming 20% of last year's corn crop and is expected to use 25% of this year's harvest, driving up the price of corn. The average price of corn is $3.20 a bushel, up from $2 last year.

Higher feed costs will reduce meat and poultry production. The National Chicken Council reported that the price of corn has forced an increase by 40% in the cost of feeding chickens, and poultry will soon cost more at retail.

USDA announced that a mere 4.1 million acres will be withdrawn from the Conservation Reserve Program in the next four years, ruling out the possibility, as economists have suggested, that it be used for extra corn production.

Meanwhile, USDA has formed an ethanol panel to address the effects of ethanol and other biofuels on animal agriculture, a move urged by NCC, the National Pork Producers Council, American Meat Institute, National Turkey Federation, National Cattlemen's Beef Association and National Milk Producers Federation.

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