Ethanol boom divides farmers and ranchers

Published January 8, 2007 12:24 am

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SALT LAKE CITY - From corn fields to Wall Street, enthusiasm for ethanol is at an all-time high. But not everyone is enthusiastic.

Demand for the corn-based fuel is driving up the cost of feed corn, making it more expensive to feed cows, chickens and pigs.

''It's hard to see where the future is, if corn keeps going up,'' said Kerby Barker, a cattle rancher in southwestern Wyoming.

Like many ranchers, Barker questions the 51-cent-a-gallon tax credit created by Congress to encourage growth of the ethanol industry. ''The feeling in our area is that all the subsidies going to support ethanol production is really hurting livestock production,'' Barker said.

A potential split is in evidence this week during the annual meeting of the American Farm Bureau Federation this week in Salt Lake City. Farm Bureau is the country's largest general-interest agriculture group.

Its members still are trying to understand the consequences of the nation's rapid expansion of ethanol.

''We have a bull on the loose here, and it's going to have a lot of implications for American agriculture and our population,'' Keith Collins, the Agriculture Department's chief economist, told Farm Bureau members Sunday morning.

The ethanol boom has been good news for grain farmers and rural communities, where new plants are opening at a breakneck pace. But the boom has put the squeeze on those who produce beef, chicken and pork.

Eventually, sustained high corn prices will probably lead to higher grocery bills. Food companies say the impact goes beyond meat and milk. High prices prompt farmers to plant corn in place of other crops, such as wheat, driving up the price of things like wheat flour, said Cal Dooley, who heads the Food Products Association, an industry group.

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