Of Cows and Corn: Artificially High Corn Prices Put the National Cattlemen’s Beef Association on the Same Side as Thomas L. Friedman

The Wall Street Journal reported today that corn plantings have hit the highest level since 1944. This is because the booming corn ethanol industry has sent corn prices skyrocketing to $4 a bushel, as Fortune reports.

The corn farmers are ecstatic. But the National Cattlemen’s Beef Association feels differently. All the surplus corn in this country due to our absurdly high corn subsidies means that corn has become an integral, if environmentally unsound, part of cattle feed. The skyrocketing price of corn has led to skyrocketing costs for beef and pork farmers.

The NCBA knows that sugar cane ethanol from overseas would provide the American corn ethanol industry with stiff competition because sugar cane ethanol is many times more efficient than corn-based ethanol. That’s why they’re lobbying the U.S. government to get rid of both the 54 cent tariff on sugar cane ethanol from Brazil and the 51 cent per gallon tax credit for ethanol refiners.

Coincidentally, this is the same position that New York Times columnist Thomas L. Friedman has taken repeatedly over the past few years. I wonder just how often he’s on the same page as the NCBA.

In any case, these protectionist tariffs and our $10 billion per year corn subsidy have created a real economic, environmental and human problem. In 2002, Michael Pollan, author of The Botany of Desire told the Christian Science Monitor:

We’re producing way too much corn. So, we make corn sweeteners. High-fructose corn sweeteners are everywhere. They’ve completely replaced sugar in sodas and soft drinks. They make sweet things cheaper. We also give it to animals. Corn explains everything about the cattle industry. It explains why we have to give [cattle] antibiotics, because corn doesn’t agree with their digestive system. It explains why we have this E.coli 0157 problem, because the corn acidifies their digestive system in such a way that these bacteria can survive.

And we subsidize this overproduction. We structure the subsidies to make corn very, very cheap, which encourages farmers to plant more and more to make the same amount of money. The argument is that it helps us compete internationally. The great beneficiaries are the processors that are using corn domestically. We’re subsidizing obesity. We’re subsidizing the food-safety problems associated with feedlot beef. It’s an absolutely irrational system. The people who worry about public health don’t have any control over agricultural subsidies. The USDA is not thinking about public health. The USDA is thinking about getting rid of corn. And, helping [businesses] to be able to make their products more cheaply – whether it’s beef or high-fructose corn syrup. Agribusiness gives an immense amount of funding to Congress.

So how do we get ourselves out of this mess? We open the market. We allow cheap sugar cane ethanol to compete directly with our corn based ethanol industry. Simultaneously, we erase the corn subsidy and use the money to bail out farmers who wind up on the wrong side of the course correction. Once the farming economy has diversified sufficiently, we take the $10 billion a year we were spending on corn and put it to better use. And we tell the NCBA to start recommending that farmers use something besides corn in their cattle and hog feed.