NCPA - National Center for Policy Analysis


April 13, 2007

The price of meat is set to rise in America as the nation's helter-skelter dash to convert corn into road fuel begins to take its toll on the supply of food, says Carl Mortished, International Business Editor at the Times of London.


  • Pressure from American ethanol producers manufacturing road fuel from corn has sent the price of maize soaring to $4 a bushel.
  • The United States Department of Agriculture (USDA) predicts that the 2006 corn crop will sell for an average of $3.10 a bushel at the farm gate, the highest price in a decade.
  • Faced with extortionate feed costs, cattle and poultry farmers are rearing fewer animals and slaughtering them early; overall, output of beef, pork and chicken is expected to decline by one billion pounds as farmers react to soaring costs.

All this will result in higher meat prices, says Mortished:

  • The USDA predicts that food prices will rise by up to 3.5 percent this year as farmers rein in output in response to feedstock costs.
  • Food prices rose by 10 percent worldwide in 2006, according the International Monetary Fund (IMF), owing in large part to a surge in corn prices and pressure on prices is expected to increase.

But in the mounting political panic over carbon emissions, U.S. politicians have largely ignored the problem, says Mortished.  Instead, they continue to provide lavish government subsidies for the production of ethanol, which has only encouraged the expansion of more ethanol distilleries.

Source: Carl Mortished, "Dash for green fuel pushes up price of meat in US," The Times, April 12, 2007.

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