Earth moving on ethanol-food competition for corn

It may not happen until after the November election, since the politicians in Congress need the farm vote for their re-election, but the ground is definitely shifting in the ethanol-food competition for the nation's corn crop.

Livestock producers certainly have trouble making $5-$6 bushel corn prices work, and only make part of the cost back in higher meat prices. This is minor compared to the huge input cost increases for soda pop manufacturers and commercial bakers. They use corn sweetners in vast quantities, because it's always been cheaper than cane or beet sugar. They are trying hard to get the high corn prices back in higher priced goods to consumers at the grocery store, but consumers are finding that ice water, coffee and tea are not so bad afterall, and that they can live without high calorie pastries.

Sen. Kay Bailey Hutchinson of Texas is one of many solons who have introduced legislation to strip the federal subsidies off ethanol and lower corn price supports from USDA. The recently passed Farm Bill would have been the best and most likely place to have done that, but the lobbyists and legislators needing fall campaign cash came together to leave corn and ethanol untouched.

The consumer pressure to lower, or at least level out, food prices will force some action after the election, no matter who is elected president. The shape of the legislation may look slightly different, depending on whether a Democratic or GOP president is calling the tune, but public pressure will force some action. You can count on it.

Even environmentalists and alternative fuels activists are rapidly coming to the conclusion that ethanol is not a sensible solution to America's energy needs. Ethanol is a net energy user, not provider, once all the farming of the corn, hauling it to ethanol plants and the tremendous amount of energy and water needed at the ethanol plant to extract the alcohol, is figured up. Due to the federal subsidy of about 50 cents a gallon, ethanol is slightly cheaper than gasoline at the pump, but it also gets 5-10% poorer miles-per-gallon than gasoline.

Except for corn farmers, who are reaping big profits on their $5-$6 a bushel corn crop right now, the support is ebbing fast for ethanol.