With rising corn costs and declining corn availability having already increased retail pork prices and pork production costs during the past year, a new study indicates that the rapid increase in corn-based ethanol production could cause costs to rise even further.
Conducted by the Center for Agricultural and Rural Development at
Ethanol production since last August has boosted pork production costs by 30 percent – about $20 million a week – with similar increases for dairy, beef, eggs and poultry. Those cost increases have pushed
“Although production costs for pork producers increased significantly since last summer,” says Neil Dierks, chief executive officer of the National Pork Producers Council, “the most immediate concern remains physical availability of corn for livestock feed.”
The study also projects that U.S. ethanol production could reach 30 billion gallons by 2012, consuming more than half of U.S. corn, wheat and other coarse grain produced and triggering higher meat prices for consumers. It is expected to reduce all meat production, as well as dramatically cut into grain and meat exports. CARD projects if between now and 2016, corn prices average $4.42 a bushel (versus $2 as seen in August 2006), pork production costs would increase by 36.8 percent, production would decline by 9.2 percent, pork retail prices would increase 8.4 percent and U.S. exports would decline by 21 percent. This would reverse the many years of consecutive pork export growth.
Source: National Pork Producers Council