U.S. biofuels policy is driving prices across the board, including corn, other grains and soybeans. It's also costing the poultry, livestock, dairy and ethanol production industries billions of dollars annually, reports Thomas Elam in a new FarmEcon study.
The National Chicken Council, National Turkey Federation and American Meat Institute commissioned the study. It forecasts that rising feed costs this crop year will cost the poultry industry (including broilers, turkeys and layers) about $8 billion more for feed, and that's on top of last year's nearly $6 billion increase. The pork industry is expected to pay about $3.6 billion more this year, after a nearly $3 billion cost rise in 2007/2008. For fed cattle, the report this year's added costs around $3 billion, on top of last year's $2.2 billion feed-cost rise.
But all is not well for ethanol distillers as their costs will climb by more than $8 billion in 2008/2009 after jumping $4.5 billion in 2007/2008. According to the study, adding up the current ethanol plants and those starting up during the next year, will use 5 billion to 5.5 billion bushels of corn annually by 2009. However, an only about 4 billion bushels are estimated to be available, which will weigh on their profitability, productivity and capacity issues.
To view the study, click here.