Ethanol: Ranchers, farmers battle over corn

The farmer and the cowman should be friends, according to the lyrics of Oscar Hammerstein and Richard Rodgers' musical Oklahoma. Their famous production was written decades before the ethanol boom, however.

Corn prices spiked from around $2.50 a bushel to more than $4 a bushel earlier this year in response to a surge in ethanol production. Prices have dropped in recent weeks, with corn for September delivery at $3.12 per bushel Tuesday. Higher corn prices mean higher feed costs for cattle, hog and chicken producers. Some ranchers are having a harder time securing grazing land, or are paying higher rents, as farmers convert acres to corn.

The result: one of the bigger shoot-'em-ups between growers and ranchers since the 1800s, when farmers fenced in the open range. Rather than firearms, the weapons of choice this time are lobbyists and dueling economic studies.

"Where is our feed going to come from, what is going to happen to our competitive position internationally?" asks Jesse Sevcik of the American Meat Institute, noting that the livestock sector is losing its position to ethanol as the main consumer of U.S. corn.

"How are we are going to respond when ethanol (producers) have a mandate to burn our food as fuel?" Sevcik says.

A recently unveiled website, balancedfoodandfuel.org, sponsored by cattle, beef, dairy, poultry and egg producers, focuses on side effects of the booming ethanol sector, including rising feed and food costs.

The coalition is lobbying to dilute an energy bill passed by the Senate last month that would increase the current mandate for ethanol use. The livestock industry also wants Congress to let a 54-cents-per-gallon tariff on imported ethanol expire.

More than 120 ethanol plants are now in operation, with the capacity to produce over 6 billion gallons a year. Another 76 are being built or expanding, according to the Renewable Fuels Association. More at USA Today