By Marshall King, Truth Staff
GOSHEN -- A fight between food and fuel is heating up.
Some farmers are rejoicing over corn prices that are shooting up because of a demand for ethanol, a form of fuel made from corn.
Others are muttering because they're fighting for the same corn to feed their livestock and are having to pay more.
"Can we feed ourselves and the world and fuel ourselves?" asked Mike Yoder, an Elkhart County dairy farmer and county official who has been active in Indiana Farm Bureau and is on the Indiana Soybean Alliance. "Yes, but it's going to take time."
For now, food may be losing.
Ethanol production is climbing and the price of corn is nearly $3.50 a bushel, the highest it's been in years. As of December, the United States had 114 ethanol plants and 70 more under construction, according to the American Coalition for Ethanol.
In 2004, 12 percent of the nation's corn crop was used for ethanol, and that climbed to an estimated 20 percent last year, according to the coalition.
Ethanol plants are springing up almost as fast as a corn stalk in July. A plant in South Bend has produced ethanol for years. A plant near Rensselaer is starting production. A number are proposed throughout Indiana, including Milford, where a battle has been brewing between advocates and opponents. In Argos, county officials recently approved a new plant.
The new Rensselaer plant is expected to produce about 114,000 gallons of ethanol from 36,000 bushels of corn a day and use $36 million of corn a year, according to the Associated Press. The federal government gives a 51-cent-a-gallon tax credit to ethanol producers as an incentive and applies a tariff to foreign-produced ethanol.
When a new ethanol plant opens, it needs corn and creates another market for farmers. New plants locally, along with a new soydiesel plant near Claypool, will give grain farmers in northern Indiana better prices than they had, at least for now.
Those also wanting that grain will have to pay more. Miller's Amish Country Poultry, which raises chickens in northeast Indiana and has headquarters in Goshen, is seeing feed costs skyrocket.
Cattle can eat byproducts left over after alcohol is stripped from corn or soybeans, but chickens and hogs can't. For the most part, they need corn.
"Feed is the major input cost of getting chickens on the dining room table," said John Sauder, vice president for Miller's.
The company buys much of its corn from local producers and has its own feed mill. Feed costs could increase by $2 million in 2007, he said.
That means higher prices in the grocery store as producers have to raise prices to keep up.
With the market needing more corn, some farmers are likely to plant more of that and less of other crops such as soybeans or other vegetables. That's likely to increase the prices of those things.
"I'm expecting that, in one way or another, it's going to end up affecting all the food items that are going into the grocery store," Sauder said.
It'll be tough for livestock farmers, Yoder said. Friends who grow grain tell him it's about time they have good prices.
"We're fighting for starch right now," he said.
Yoder said most livestock producers in Elkhart County, one of the state's leading dairy counties, will be OK and that the market will swing back.
Yields will go up. Farmers will again produce a surplus of corn, and technology will continue to improve, allowing both increased production and new types of fuel from plants.
Eventually, ethanol could be made from cellulose in plant fibers rather than grain. Until then, people will argue over whether ethanol is worth the effort.
Michael Pollan, whose book "The Omnivore's Dilemma" highlighted how corn is grown industrially, said that even though corn is a plant, U.S. farmers use large amounts of petroleum to raise it.
"If you factor in the cost of all that fossil-fuel-grown corn, it certainly seems a lot less green," he said in a recent phone interview.
He expects the high prices and lack of corn to be a blip as big agriculture companies such as ADM and Cargill needing corn for high fructose corn syrup won't want to pay the higher prices and will urge farmers to find a way to produce more corn.
A study by researchers at the University of California, Berkeley, and released in "Science," assessed the energy value of ethanol and found that it's better than gasoline in terms of greenhouse gas production by 10 to 15 percent.
Cellulose ethanol production would be more help in reaching the country's energy goals of less dependence on foreign oil, according to the researchers.
Ethanol from corn and diesel from soybeans are the easiest to produce now. Ethanol from corn may not be the most efficient way to transfer solar energy into something Americans can drive with, but it helps reduce that dependence on crude from other places, Yoder said.
During the transition period, people will have to get used to higher food prices, Sauder said.
"I think we have to become fuel independent, but I don't think we do it at the expense of food," he said.