Americans Warned of Higher Food Prices as Corn Goes to Ethanol

Meat producers are facing sharply higher feed costs. But farmers are expected to plant more corn. Transcript of radio broadcast:

19 March 2007

This is the VOA Special English Agriculture Report.

The United States Department of Agriculture says high demand for ethanol fuel made from corn will mean higher meat prices. In its monthly crop report on March ninth, the department said feed costs are rising for cows, pigs and poultry birds. Corn, or maize, is their main feed.

Corn has been selling at more than three dollars a bushel. Last year, the average was two dollars.

The government says ethanol is using twenty percent of the American corn crop from last year. With this year's harvests, the amount is expected to reach twenty-five percent.

The National Chicken Council has objected to Congress about the situation. The council is a trade organization that represents the industry. It says the feed cost of the chicken industry alone has risen by forty percent.

In January, Tyson Foods, the world's biggest meat processor, reported its first profitable three-month period in a year. But the head of the Arkansas company warned that sharply higher corn prices have become a "major issue" for the food industry. Richard Bond says people will have to pay more for food because companies will be forced to pass along rising costs.

But Deputy Agriculture Secretary Chuck Conner says demand for corn will probably get farmers to plant more corn. A University of Missouri Extension official says ethanol could bring the biggest change in American agriculture since farmers began planting soybeans.

Some economists have suggested that land from the Conservation Reserve Program should be used for additional corn production. But the Agriculture Department says only a limited area of land will be released for use over the next four years. The program supports the planting of things like native grasses or trees to reduce the loss of soil from croplands.

The department has appointed a committee to study the needs of biofuel producers. These are fuels like ethanol that are made from renewable resources.

On March ninth, the United States and Brazil signed a cooperation agreement on biofuels technology. The signing took place in Sao Paulo during the first stop on a trip by President Bush to Latin America. Seventy percent of the world's ethanol supply comes from the United States and Brazil. But while most American ethanol is made from corn, most Brazilian ethanol is from sugar cane.

And that's VOA Special English Agriculture Report, written by Jerilyn Watson. Transcripts and audio files of our reports are at voaspecialenglish.com. I'm Shep O'Neal.