Beware of Texans bearing information
A recent Associated Press story with a Lubbock, Texas dateline, laments the effects that higher corn prices are having on livestock producers and the potential impact of increased meat prices on consumers.
The only acknowledgement that there is anything positive about growth in the ethanol industry is the statement, "Motorists might save a few cents a gallon filling their tanks with ethanol." This is followed by the warning, "But they could soon be paying more for a burger and a milkshake as a result."
After many years of weak crop prices, we can certainly see a positive aspect in an increase in crop demand. Traditional farming methods, dating back to before the previous century, involved a mix of crop and livestock production. This provided some buffer from the effects of fluctuations in the price of one product relative to another. The smaller livestock operations also meant manure produced on farms was an asset rather than a liability.
We are not saying that livestock only operations should cease to exist. We wish them success. As consumers, we also enjoy having food available as cheaply as possible. However, for decades, the cost of food in America has become cheaper relative to average income as well as compared to other consumer goods, while the price of energy has soared. We welcome an adjustment in this trend.
The recent AP article was not the first one we've seen with a Texas dateline having an anti-ethanol bias. In June of 2001, an AP article lamented President Bush's decision to make California use ethanol as an oxygenating additive rather than the horribly toxic MTBE, which is derived from petroleum.
Ironically, that article complained that ethanol would increase the cost of gasoline.
The 2001 article also made dubious claims of political benefit for Bush's position - "Bush is assiduously courting Iowa, a major supplier of corn, looking ahead to the 2002 congressional elections and to his own potential re-election contest in 2004."
Is that considered brilliant political strategy, to write off states like California and Texas in order to concentrate on Iowa with its five congressional seats and seven electoral votes?
Contrary to the prevailing view in Texas, producing ethanol made sense in 2001 and makes sense today.