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Increased ethanol production divides farm lobby
By Christopher Leonard
Associated Press
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ST. LOUIS — As a chief advocate for corn farmers around the country, Rob Litterer will be working the halls of Congress this fall to push for increased ethanol production. But he’s facing stiff opposition from what on the surface seems an unlikely source — the farm lobby.

The burgeoning ethanol industry is creating a wave of prosperity for rural towns throughout the Midwest, but the energy bonanza is also pitting farming groups on separate sides of the fence.

Corn farmers are pushing for more ethanol production as the industry creates an enormous new market for their crop, giving corn prices the kind of lift they haven’t seen in years. But the corn farmer’s win is the hog farmer’s loss. Meat, dairy and other food producers are pushing back against the ethanol boom as higher grain prices cut into their already slim profit margins.

So as Litterer, incoming president of the National Corn Growers Association, visits with members of Congress in coming months, he knows that meat and dairy lobbyists will be close behind, delivering the opposite message.

“There is no question they have a policy that they are opposed to an increase,” Litterer said. “But I don’t think their opposition carries any water.”

The tension between grain producers and food producers is roiling agricultural markets around the world as high oil prices spur governments to subsidize food-based fuels like ethanol and biodiesel.

The Mexican government recently put a cap on tortilla prices after prices shot up between 20 and 30 percent over uncertainty that there would be enough U.S. corn available for export. Brazil has asked the World Trade Organization to formally investigate U.S. farm subsidy programs — including payments for ethanol production. Brazil is the second-largest producer of ethanol in the world after the United States, but is the No. 1 exporter of the fuel, which in Brazil is mainly made from sugarcane.

The political waves — and their effect on government policy — can mean life or death for the budding biofuels business.

This fall, Congress will consider a new fuel standard that could boost production as high as 36 billion gallons by 2022. But the future of that bill is uncertain because of the food fight shaping up between grain producers and livestock lobbyists.

“It’s very true that the agricultural lobby will speak with a louder voice if it’s saying the same thing. In that sense, it’s been a less united voice than it has in the past,” said Pat Westhoff, an economist with the Food and Agricultural Policy Research Institute at the University of Missouri.

Westhoff said it’s inevitable that a rise in corn prices will increase the cost of food. Corn and its derivatives like corn syrup are staples for a variety of foods, from soft drinks to wheat bread.

But that doesn’t mean the average person will notice a price increase at the grocery store, Westhoff said.

U.S. consumers spend about $700 billion a year on food. A $6 billion increase in the cost of corn — which amounts to about $1 a bushel — would still only raise food costs about 1 percent, he said.

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Reader comments on this story - 5 total

Note: All views and opinions expressed in reader comments are solely those of the individual submitting the comment, and not those of the Pantagraph or its staff.

jocko wrote on Oct 22, 2007 4:26 PM:

" Google ethanol energy requirements and do some reading. A lot of differing opinions. Who's right? Who knows. Everyone has their own spin. "

ethanol energy requirements wrote on Oct 21, 2007 7:38 PM:

" The Wikipedia article (with references) on ethanol addresses this issue. "

jocko wrote on Oct 21, 2007 2:35 PM:

" What are your sources that say ethanol requires more energy than it produces? "

To "good for the farmers..." wrote on Oct 21, 2007 12:38 PM:

" Grain prices have a slight impact, but not nearly the impact on food costs as transportation costs do. You should be pushing for increased oil production. "

good for the farmers, but nobody else wrote on Oct 21, 2007 12:57 AM:

" Ethanol is supposed to reduce our dependence on foreign oil but as long as the production of ethanol requires more energy than it generates it's a bad deal for everybody but the farmers. Isn't it ironic that one of the things we fear the most, high energy prices, will in the short run at least (and maybe the long term as well) be made WORSE by increased consumption of resources to produce ethanol while the price of food, under control until recently, is going UP AND UP dramatically? The direction of this country is indeed questionable. "
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