From Deseret News archives:

It ain't just chicken feed

Will cost of corn fuel a spike in grocery prices?

Published: Wednesday, June 6, 2007 12:47 a.m. MDT
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Last year's corn harvest was the third largest in U.S. history, with 10.5 billion bushels. "But any shortfall in corn production, such as a drought, will cause difficulties across all sectors of agriculture and food production," said Donohue.

However, the National Corn Growers Association contends that U.S. farmers can grow enough corn to meet market demands and that the higher corn prices won't affect retail grocery store prices.

"We feel we can supply both the feed and the fuel markets," said Nick Weber, a spokesperson for the National Corn Growers Association, in a telephone interview from his St. Louis office. He cited a USDA preliminary report that farmers are planting 90.5 million acres of corn this year, compared to last year's 78.6 million acres.

Although corn prices have averaged $2.40 a bushel since 1982, "Corn at $3 a bushel isn't unprecedented," said Weber. In 1995-96, $3.50 was the average price, due to a drought. "Even when it was that high, the prices for things like ground beef and pork chops stayed relatively the same."

Hickman said that although the corn prices won't lead to a chicken shortage, there will be fewer featured sales on boneless skinless breasts — America's favorite part of the chicken.

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Likewise, you'll see fewer featured sales on steaks, said Brent Tanner of the Utah Beef Council. "Beef prices aren't significantly higher now, but next year there will likely be less beef, and that could force an increase in prices. When you open the paper and see the grocery ads, you won't see rib-eye steaks featured at $3 a pound. They will be closer to full price, because there won't be the tonnage of beef that people are trying to move."

The price hike in corn has hurt Utah cattlemen, Tanner said, although beef don't rely as much on corn as hogs and chickens do.

"Producers in Utah are probably going to get 10 to 15 cents less per pound this year for their live calves, and when you've got a 500-pound calf, that equates to quite a hit," he said. "Most of our calves are shipped to the Midwest to finish feeding and processing in the corn-belt area, and the transportation costs are almost double."

To offset the price of corn, beef producers might shift to feeding more forage grasses. "But Americans like corn-fed beef because it has a nice white creamy fat and a milder flavor," Tanner said. "With forage-raised animals, you tend to have a darker colored meat and a yellower fat, and a different flavor profile."

Tanner, along with Utah Department of Agriculture commissioner Leonard Blackham and other agriculture officials, recently went to Washington, D.C., to share their concerns with Utah's legislators, who will be voting on a new farm bill this year.

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