King Corn is throwing hog farmers under the bus

As the debate over ethanol mandates continues to boil over inside the beltway, here’s a story about one impact ethanol is having on a subject near and dear to all of your hearts: Bacon. Yes… I knew that would get your attention. How are those two things related? I’m glad you asked.

Corn is a major part of hog feed, and since we’re effectively burning so much of our corn for inefficient, lower energy fuel because of the Renewable Fuel Standard mandates, that means that the price of corn goes up. Now guess where the most hog farms in the United States are located. If you said Iowa, give yourself a cookie. The result is rather obvious, as reported in National Hog Farmer magazine. (What? You don’t have a subscription to National Hog Farmer?)

The United States’ subsidized and mandated ethanol program began in the mid- 2000s and pushed corn demand higher at a faster pace than U.S. corn producers could raise corn output. The result was corn prices that rationed the available supply by forcing other corn users to reduce their usage either by contracting their businesses or by finding alternatives to corn. The U.S. pork industry stopped growing and found alternatives, but costs of production rose sharply from the low $50s/cwt. carcass to $60 to $80/cwt carcass. Then the drought of 2012 came along and made the situation much worse, pushing costs to a record of $95.60/cwt carcass for hogs sold in October 2012.

As the article goes on to note, the industry mostly recovered and stabilized in the three year period following 2012, but it’s still a tenuous situation. It’s estimated that two years with significant crop failures could once again drive pork prices through the roof. When you combine this news with the unstable weather conditions we’ve seen lately, it’s obviously something that hog farms are keeping their eye on.

All of this is taking place at the same time that demand for pork products is surging both domestically and in Europe. In response, some Iowa farmers are doubling down and expanding their operations. (Des Moines Register)

Iowa’s largest pork producer is rapidly expanding, adding nearly 90,000 pigs at time when water quality issues have state and local leaders calling for a moratorium on industry expansion, says a grassroots activist group.

Iowa Citizens for Community Improvement says Iowa Select is adding at least 19 hog confinements and the Des Moines group wants the Iowa Department of Natural Resources to extend the permitting period to 90 days so residents and county supervisors can “review this onslaught of factory farm proposals.”

Beyond the basic question of bacon availability, keep in mind that the single hog farm featured in the linked story provides jobs for 1,200 full-time employees and an additional 650 contractors. Multiply that across all the farms in Iowa and you’re talking about a lot of jobs. Iowa Senators Chuck Grassley and Joni Ernst have been playing hardball on the ethanol question, going so far as to threaten the confirmation of EPA nominees, and they’re doing it to keep the support of the corn lobby and proponents of the ethanol mandates. But what about the hog farmers?

And more to the point, Senators… what about the bacon?