Higher Corn Prices and Lower Yields Causing Competition

By: Cassie Anderson Email
By: Cassie Anderson Email

Farmers are expecting a short crop this year. They blame Mother Nature with her high temperatures and low moisture. This has users competing harder for the lower yields.

"The values of calves has dropped significantly because of the depressed corn supply," Michael Kelsey with the Nebraska Cattlemen said.

The Nebraska Cattleman are voicing more than ever, their opposition to federally mandated ethanol production. They fear a corn shortage may lead to a beef shortage, when ranchers cant afford to feed their livestock.

"This has long term potential to be very negative towards Nebraska's economy That's what you have to look at in terms of drought. It just takes time for producers to rebuild that heard and to get those calves into the beef production chain so it benefits downtown Nebraska," Kelsey said. "We believe we can position Nebraska with corn, cattle and ethanol on itself, rather than having these artificial forces that adversely have us working against each other in some cases."

Corn prices are giving ethanol production their own set of challenges.

"I think the markets have reacted quickly and probably overreacted to the potential for drought that we have seen," Steve Sorum with the Nebraska Ethanol Board said.

Farmers are managing the balancing act between lower yields and higher prices. That price is ultimately passed down to the consumer, whether it's at the super market or at the pump.

"We have seen an significant increase in ethanol prices and prior to that a significant increases in corn prices and thus reduced profitability to ethanol producers. As a result, there are three plants in the state who have temporarily ceased operations," Sorum said.

The Nebraska Ethanol Board says it's a waiting game to see how harvest turns out.

"Some broad federal policy changes towards one industry or the other is counter productive for the state," Sorum said.

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