How Corn (Yes Corn) Saved the Midwestern Farmer

There was an interesting article in today's Tribune today (some registration may be required).

It detailed the significant rise in corn prices and farmers' flurry to plant as much of it as they can. The article suggests that this is mostly due to the increased consumption of corn for energy (ethanol) purposes.

For a wide swath of the country this commodity crop seemed to have bottomed out. It seemed that many farms were totally dependent on the government corn subsidies to survive. Now, with more money behind it, the subsidies seem to be underwriting pure profit.

Although a pedigreed product can cost twice as much as unheralded varieties lacking built-in protection against weeds and pests, price is barely a consideration, Arndt says. "If your farming community is suffering, people ask the price. Now price isn't nearly the issue. Agriculture has been pretty good to people."

The article cites an average $20/acre difference in the price of corn and soybeans over the last few years. That has skyrocketed to a $90 difference.

What do farmers seem to be doing with their newfound wealth? Pouring it back into corn production, of course. I hardly fault them for this capitalistic plunge, but it does concern me.

Some farmers also suggested that it will be more difficult to feed the livestock that have become so dependent on the industrial feed derived from corn now that the price has shot through the roof (see books like Omnivore's Dilemma for more on this topic).

A couple of random thoughts

Will a ripe market for corn production coupled with the increased government backing of alternative energies such as ethanol finally make the technology more efficient?

You would almost hope that some farmers would find a way to not become even more dependent on the cash-crop-of-the-moment and put their profits towards diversifying. What goes up must come down.

The likelihood is that the agribusinesses that are throwing their weight into corn are different than the community supported farms that make their way to the summer markets - but it seems like this shift in the agricultural world is bound to have some effect on the burgeoning local food movement. What do you think that will be?

It seems that eating local and eating organic have finally reached a critical mass in terms of societal impact. The profit margins have gotten high enough to even get the big boys' (read Walmart) attentions. Does this summer's pending corn jackpot change the economic landscape?

I found this a fascinating portent of what might be a the great fertilizer fight of 2007.

Discuss amongst yourselves.

In the long run, corn -> ethanol is not a sustainable energy model for this country. If we converted all the corn this country produces to ethanol, we'd starve the world, and still be dependent on foreign oil.

We need to advance the techniques of breaking cellulose down cheaply (with low energy cost and low emissions of waste water) so that generic biomass (hay, corn stalks, hemp, switchgrass, etc.) could be used for energy production.

Solution left as an exercise for the reader.