Gov. Rick Perry of Texas has requested the EPA to cut the ethanol mandate by half and a chorus of support has been registered by representatives of the hog, broiler, egg and turkey industries. A prominent agricultural economist Dr. Thomas Elam has determined that diversion of corn to ethanol has resulted in significant inflation in food prices but only a minimal impact on reducing the cost of gasoline. It is calculated that the production cost of eggs increases by 6 cents per dozen every $1 per bushel increase in the price of corn. The projection is based on the concurrent rise in price of DDGS, soybean meal and other grains which move in step with corn, increasing the costs of feed for laying flocks, breeders and replacement pullets.


The current situation has been exacerbated by the unprecedented floods in the upper Mississippi basin which will depress both acres harvested and yields to values far below the optimistic USDA forecasts published in early June. The CBOT is a more reliable predictor of future supply than the Federal government which is perusing a reckless and destructive energy policy with regard to ethanol.