Maple Leaf Farms official worries that ethanol plants will drive up food prices

BY TERESA SMITH, Times-Union Staff Writer

Terry Tucker of Maple Leaf Farms enumerated his misgivings about ethanol production demands on the corn supply at the Kosciusko Development Inc. meeting Wednesday.

Maple Leaf Farms, in Milford, is the duck industry's leading producer and manufacturer.

He's not sure the "corn-belt" states, Indiana, Illinois and Iowa, can meet the supply for proposed ethanol plants, let alone provide feed for livestock producers in this country and in other nations.

"There are three proposed ethanol plants in Kosciusko County," Tucker said. "Stage 3 for the Louis Dreyfus Plant at Claypool, the Dreyfus plant at Burket and the Verasun plant at Milford. Each of these plants would likely use 30 to 36 million bushels of corn each year.

"In 2005, our county produced 14 million bushels and a very high percentage of this was consumed by local livestock and poultry."

The state has one operating ethanol plant, in South Bend; 13 plants under construction; eight approved plants; and 12 proposed or rumored plants.

Combined they would consume more than one billion bushels of corn annually, more than was produced in Indiana in 2006. When operational, the combined plants could produce three billion gallons of ethanol, three times the amount originally projected by the Indiana State Department of Agriculture.

Tucker said in Iowa there are 21 plants in production and another 20 to 30 under construction and proposed. The state needs five million more acres of corn to meet current demand or it will be forced to import corn.

In Illinois there are four plants in production and another 44 under construction or proposed.

Nebraska has 12 plants in production and another 27 proposed.

Minnesota has 16 plants, four are expanding and others are proposed.

Tucker said the state tax credit of 51-cents per gallon amounts to a $50 million tax break for a plant producing 100 million gallons of ethanol a year.

Quoting an Iowa State University agricultural economist, Tucker said if 37 million bushels of corn is fed to hogs, this equates to 800 jobs. The ethanol industry provides 80 jobs for the same amount of corn consumed.

"Pork producers are already seeing the negative effects of high corn prices," Tucker said.

Corn was $1.70 per bushel in 2005. It is well over $3 now with just the anticipation of ethanol plant demand.

"Agriculture is headed into unchartered waters," Tucker said. "There's a lot of tension out there between producers of corn, farm implement companies, livestock producers, food manufactures and the ethanol industry."

KDI member and Creighton Bros. general manager Ron Truex agreed with Tucker's observations and added some of his own.

Truex testified before the National Agriculture Committee in Washington DC in October.

"In my opinion the state and federal government plans to deal with problems as they come up.

"We ship grain to the southern states to feed their livestock and export it to other countries. If the three "I" states come up short it will have international implications and will affect the balance of trade."

Creighton Bros. has already seen costs go up and consumers will eventually see food prices go up. The cost of a dozen eggs has already increased 8-cents in the last eight weeks.

Tucker said he met with Gov. Mitch Daniels recently and asked him about the plans for ethanol plants.

"When food prices really go up, prices for poultry, pork, beef and dairy products, when there are food or animal protein shortages, the public will look to you and ask what you were doing," Tucker said he told the governor.