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Wednesday, April 11, 2007

Milk Prices at Record High

Milk prices are at a record high, says The International Dairy Foods Association (IDFA), a US-based association representing the country's dairy manufacturing and marketing industries.

So why should you care? Most of you readers don't use a lot of dairy in your lives, after all.

Because of the reason that milk prices are rising
according to the article at

[T]he IDFA pointed out that growing demand for corn to produce ethanol is causing feed costs to escalate. Feed is the largest operational cost for dairy farmers. "Ethanol production is diverting some of the available corn formerly used to feed dairy cows, and some farmers are diverting land that had been used to produce other feed crops to grow more corn instead," [IDFA president and CEO Connie] Tipton said.

The IDFA said feed costs are not expected to drop in the near term, with prices in the corn futures market indicating that the price of corn will remain relatively high this year. Prices have also risen for soybeans, another feed crop, the IDFA said.

The diversion of corn for ethanol is an example of why using food stocks for energy production is a bad idea. Ethanol itself makes sense, as does alternative fuels for gasoline. But growing corn to make ethanol and taking away land from other crops to grow corn that won't go directly or indirectly into the food supply will simply push food prices up across the board.

This is senseless waste. Other potential biofuels can be grown on land not suitable for prime agricultural use. And even if the entire corn supply of the U.S. was diverted to ethanol we wouldn't have enough to eliminate our dependence on oil.

I can't blame farmers for wanting the crop that will make them the most money per acre. I can blame the lack of a coherent energy policy in this country. Whether you have dairy or not, even whether you eat meat or not, you will be directly affected by the increased cost of food as more and more resources are devoted to corn for ethanol. Let's nip the madness in the bud and demand a sensible biofuels program now, as one of the many, many changes we must make for a livable energy future.

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1 comment:

Alisa said...

I think it is excellent that you address this topic. People ignore the other side of the coin.

No need to go into the politics of it right now, but the government's promotion of ethanol is highly unfeasible. Options such as coal gasification are staring us right in the face, and don't compete with our food supply.

The ethanol push is one more factor that is escalating our commodities prices and thus perpetuating the inflationary cycle.

Did I mention my day job is as a financial analyst with a commodities license? I don't get to exercise that side of my brain as much in the dairy-free world. Thanks Steve : )