The ongoing drought and the devastating reduction in corn production experienced by farmers nationwide is renewing an ongoing debate over ethanol production, leading some politicians to push for an end to certain biofuels subsidies.
With a nationwide drought showing few signs of relenting this year, farmers across the country are scrambling to mitigate the worst of the weather conditions. With some farmers reporting up to 80 percent crop losses and with some major corn producing states indicating only 15 percent of their crop in good condition, many agricultural producers are turning to any available source to help protect their incomes.
One of those sources has been the ethanol industry. With crop supplies dropping, particularly corn supplies, food prices nationwide are expected to sharply increase over the next year, as are feed prices for livestock farmers. The diversion of corn into ethanol production, however, is helping to keep corn prices high and helping corn farmers maximize their profits in the midst of severe weather.
Some industries and politicians are calling for an end to ethanol subsidies in order to prevent major food price increases. The ethanol industry has countered by pointing out that up to one-third of corn diverted into ethanol production ends up as livestock feed, including the production of distillers grains.
President Barack Obama has not indicated a willingness to divert from current ethanol mandates or subsidies, nor has Secretary of Agriculture Tom Vilsack.
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Written by: Justin Ellison / Farm Plus Staff Writer