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As corn prices skyrocket, debate continues over food and fuel

This year's corn crop is forecasted to be poor, leaving less to go around for food and for fuel.

August 16, 2012|by Linda Russell | KY3 Reporter

SPRINGFIELD, Mo.-- The corn harvest is still in the fields yet, but the widespread drought means what's picked will be very valuable.  That's leading to more debate over food versus fuel.

Humans actually consume a pretty small percentage of the corn crop. Animal feed used to consume about 80 percent, but now, that percentage has dropped, and the amount used for ethanol is about 40%.

Jon Gaddy's herd of dairy cattle consumes a lot of corn in the milking barn.  "They're probably getting 20 to 25 pounds of grain per day, per cow," says Gaddy.

With the direction corn prices are headed, corn is valuable feed.  "I've heard of guys the last couple weeks giving over 9 dollars a bushel for the corn, and that doesn't work out," Gaddy says.

The Gaddys are fortunate enough to have their own corn crop to feed the herd of dairy cattle.  They use a feed grinder to make a much more affordable feed.  "I haven't sold any.  I'm holding onto it," Gaddy says.

Some of the latest estimates say this year's corn crop could be down thirteen percent, leaving less to go around for food and for fuel.  "They expect to produce about the same amount of ethanol this year as they did in years past," says Mike Burton, Associate Professor at the Missouri State University School of Agriculture.

The Environmental Protection Agency is under pressure to suspend or lower mandates on how much ethanol the country must use, which is also likely to get more expensive.  "People will be looking for their price breaks if they he those flex-fuel enabled vehicles," Burton says.  It may not be a fuel containing corn. 


Many of Gaddy's neighbors don't have irrigated corn fields.  "Most of them have chopped, chopped it for silage just to try and salvage something out of it," Gaddy says.

A well he drilled three years ago is what saved his corn field and maybe even his dairy herd.  "We got a strong well," Gaddy says.

For about the last thirty years, corn prices have hovered around three to five dollars a bushel.  Now, they're forecasted to exceed eight and nine dollars a bushel.  Expect prices at the grocery store to reflect those higher prices as well.

To read more about corn production and use, visit the USDA website here.

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