They are, at once, 1-ripping off the taxpayers, 2-significantly decreasing the food supply, 3-raising the cost of fuel and 4-making the air dirtier. Only the US Congress could be this monumentally stupid and destructive.
My daughter, who owns a feed and farm supply business in Bosque County, Texas, 40 miles west of Waco, reports that corn is being grown in Texas where corn has never grown before. This corn is destined for the ethanol craze.
The agricultural programs supporting corn make it a sure winner for growers. If the crop fails for any reason, federal crop insurance covers the losses. If a bumper crop and a glut tend to depress prices, there is compensation for that, too.
A corn grower cannot lose money. How would you like to be in a business that can't lose money? And 51 cents per gallon federal subsidy for ethanol production sweetens the deal, further distorting grain markets.
The new corn planting in Texas is replacing soybean planting creating a thin supply of soybeans and escalating prices. Soybeans and corn, among other things, are the favored feed for chickens, eggs and dairy production. Cottonseed meal is the second choice. It is not in short supply, but it is chasing the price of soybeans.
Before this crop cycle is completed, grocery shoppers can expect to see breathtaking prices for eggs, chicken and dairy products. Beef and pork won't be far behind, but there are some substitute feeds for them.
The ethanol farce behind all this is promoted by two misrepresentations by the Bush White House.