On meat prices, ethanol, corn . . . and cake

You can’t have your cake and eat it too. It’s a hackneyed expression that never made sense to me. If you give me cake and tell me I can’t eat it, then you and I are going to have a big problem. That old adage came to mind when I read the recent news stories blaming higher meat prices on ethanol. I’m glad livestock prices are finally recovering. I’m glad corn farmers have the livestock industry and the ethanol industry as customers keeping the price of corn from dropping below the cost of production.

Skimming headlines today, I first read a story about why corn prices are down, then I read a story about how high corn prices caused by ethanol are increasing the cost of meat. TV commentators have jumped on the bandwagon, telling consumers that they’ll be paying more for meat because the ethanol industry is using up all the corn. Really? One only has to look at the record crops, the enormous corn surplus of over 2 billion bushels, and the modest corn price, hovering just around $3.20 a bushel to know that statement is ridiculous.

A lot of this misinformation is coming from that very strange, but well-funded alliance consisting of the meat industry, environmentalists, big oil and grocery manufacturers. If corn farmers are the cake, and you want corn prices to return to below $2 a bushel, then that old adage finally makes sense–you really can’t have your cake and eat it too.

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