« | »

Ethanol Is Making Milk Prices Skyrocket!

From a morally conflicted CNN:

Skyrocketing milk prices hit families just in time for school

By Thom Patterson

CANTON, Georgia (CNN) — Record-high milk prices are stinging Americans at the dairy case, just as millions of thirsty school children are returning to classes.

The average retail price of a gallon of whole milk has never been higher — $3.80 a gallon — according to July Department of Agriculture statistics. Experts blame the price spike — up 51 cents since February — on milk shortages in Europe and Australia.

Prices are approaching $5 a gallon in Georgia, where on a sweltering summer day last week, about 100 children and parents toured Mark Cagle’s dairy farm north of Atlanta.

Tim and Beth Byington wrangled their two preschool children around the farm, surrounded by mooing Holsteins.

“It’s really expensive when you’re on a budget,” said Beth Byington, who explains that her hands are tied when it comes to the cost of milk.

“We can’t do anything, and we have to buy our milk,” she said. “So sometimes we cut back on other food — like buying store brands and other things.” …

The cost of dairy products also touches millions of children who depend on America’s federal school lunch program, which includes milk as a necessary part of their nutrition…

What gives? Grocery shoppers in Omaha, Nebraska, may be surprised to know that the blame rests on the other side of the Atlantic — and the other side of the world. It’s all about supply and demand. Decreasing dairy supplies and rising demand for it are forcing prices up.

Supply is down in Australia and Europe, while demand is up in nations with rising standards of living such as China.

“A drought in Australia has reduced their dairy export potential while the European Union has quotas that limit increases in milk production,” said professor Michael Hutjens, a dairy industry scholar at the University of Illinois.

Also playing a smaller role in the price spike is higher demand for corn-based ethanol fuel, according to USDA analyst Ephraim Leibtag. Increased demand for corn pushes up costs for cattle feed, which is then added to the price of milk.

Although farmers such as Cagle are getting more money for their milk, they also are forced to pay higher prices to feed their dairy cows. The Southeast has been plagued for the past few years by droughts which have pushed feed corn prices higher.

“The dairy farmer is not making a significant amount of money because the input costs are so much higher than they were,” said Cagle.

The article tries to argue that it is droughts (aka “global warming”) that is causing this steep increase in corn prices.

But, buried on the back pages of the Midwest papers, the market analysts say it is due to ethanol production:

E85 drives corn craze

Enthusiasm for new fuel affects prices of other foods

By Eric Becker
Friday, August 10, 2007

While putting ethanol instead of petrol in your gas tank may help save the environment, the higher prices of corn as a result may not help your savings account.

In June, corn prices were more than $3.50 per bushel, well over the average historical price of about $2, as the anticipated demand for corn by ethanol fuel producers sent prices rising.

National attention has been focused on the price of corn since producers of E85 – a mixture of 85 percent ethanol and 15 percent gasoline – have been demanding increasing amounts of the crop…

But this is just the beginning.

Just wait until the dairy farmers have to appease the global warming jihadists by paying taxes on buying carbon offsets for their methane producing cows.

Think of the children.

This article was posted by Steve on Friday, August 10th, 2007. Comments are currently closed.

13 Responses to “Ethanol Is Making Milk Prices Skyrocket!”

Sorry, comments for this entry are closed at this time.

« Front Page | To Top
« | »