06/12/08 Food Before Fuel

Food Before Fuel. I'm Greg Martin with today's Line On Agriculture. You have been hearing a lot about the Food & Fuels debate. Richard Lobb, Communications Director with the National Chicken Council says that ethanol demand is really making it difficult on the poultry industry. LOBB: One thing is very interesting; corn really went gang busters today on the Chicago Board of Trade. A bushel of corn went up 30 cents just in one days trading which is really extraordinary so the corn market is really going crazy and that is partly because of the very bad conditions in the Midwest right now but it's also because of the surging demand from the ethanol sector and that's what we're concerned about. Lobb says that this really is the fault of the government. LOBB: The federal ethanol program consists of a mandate that the fuel industry has to add 9-billion gallons of ethanol derived from corn to motor gasoline just this year. And the fuel companies who do that, and they don't have any choice but to do that, are compensated with a tax credit that's worth .45 cents a gallon and then the ethanol sector is protected by a tariff to keep out the cheaper ethanol from Brazil. According to Lobb, there will be a greater demand for corn in the next year for fuel production. LOBB: Last year they pulled off over 25% of the corn crop went into ethanol. Next year it'll probably be a third or more of the nation's corn crop is going into ethanol. And this is important to us because we need corn to make feed for the chickens. We buy over a billion bushels of corn a year plus a substantial amount of soybean meal so the nation's chicken companies are big buyers of corn. While the price of chicken has gone up, Lobb sees even higher increases in the near future. The poultry industry is responding by creating a website to help disseminate information. LOBB: We have put up a website called foodbeforefuel.org and it is just an informational site, it has the facts and figures on this, some basic factual stuff so if people want to get more educated about this issue they can visit that website and see what's going on. There are a lot of different perspectives and views on this issue and we understand that. We are not trying to pick any fights with the corn farmers. That's today's Line On Agriculture. I'm Greg Martin on the Northwest Ag Information Network.