Ethanol at Center of Farm Prices

With farmers across the country still reeling from this summer’s devastating (and, in many communities, ongoing) drought, ethanol has taken center stage in ongoing debates over federal farm policy and agricultural production.

For the past several months, farmers, ranchers, and ordinary Americans have experienced the worst drought in recent American history. With temperatures reaching all-time highs (many regions reported the highest recorded summer temperatures since the government began collecting weather data) and with precipitation at all-time lows, the summer has been marked by climatological extremes. More than one-third of the country is experiencing severe to extreme drought and more than 1,000 counties nationwide have been declared disaster areas.

The result of this unusual weather has been a severe drop in agricultural production, especial in the Midwest and across the Corn Belt. Despite the widespread adoption of drought resistant corn, most corn producing regions saw their production plummet, with the overall American corn crop smaller than it has been in roughly a decade.

With corn production declining and with food prices expected to go up, some farm groups and consumer advocacy organizations are pushing for an end to ethanol subsidies and mandatory ethanol production. Livestock farmers in particular are crusading against ethanol, claiming that diverting corn into fuel production is driving up feed costs and crippling their industry.

Corn farmers, however, are clinging to ethanol mandates, hoping that the increase in corn prices will make up for their lost summer production.

With the 2012 presidential election hinging on several Corn Belt states (including Iowa and Ohio) many political experts are predicting that ethanol will take a major place in the upcoming campaign.

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Written by: Justin Ellison / Farm Plus Staff Writer