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Corn Farmers Prosper, Others Lose Out with Ethanol Use

As corn prices have risen with demand for ethanol in recent years, corn farmers are prospering. But others -- such as hog farmers who rely on corn feed -- are facing tough times, and some critics blame ethanol demand for rising food prices worldwide.

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  • STEVE RUH, Ruh Farms:

    We always have Mother Nature to deal with. And that, of course, is the trump card over all. But when you can market your crops in a manner that we can today, it certainly gives you a positive feeling going into the growing season.


    Those high prices are due in part to the increasing demand for ethanol, says Ruh. Last year, 23 percent of U.S. corn went into ethanol production, and next year almost 30 percent of the crop will go into biofuel.

    Ruh farms 2,000 acres and used to plant about half-corn and half-soybeans, along with some wheat and alfalfa. Now, corn prices are so good, Ruh will put 70 percent of his land into corn.


    Corn prices have gone up certainly because of the demand for ethanol and America's passion for green fuel and going green. That has certainly helped. The weak dollar certainly helps. So we have record exports right now. And that along with ethanol has really driven the price high.


    But in a world where corn-growers can be seen as the winners, others are not doing so well.

    The biggest losers in the push for more ethanol have been livestock producers, particularly hog farmers. Every time the price of corn goes up by a dollar a bushel, it costs $10 more to get a hog to market.

    Those high costs have John Kellogg wondering if he will be able to keep the hog farm that his great-great-grandfather began in northeastern Illinois in 1846.

    Kellogg's breeding sows produce 32,000 pigs per year. Unlike cows and chickens, a pig's diet is almost solely corn-based. When the price of corn doubled last year, Kellogg began losing $32 a pig.

    He puts much of the blame squarely on the demand for ethanol.

  • JOHN KELLOGG, Kellogg Farms:

    I think the increased demand for corn due to ethanol has significantly impacted the cost of corn for me. We moved a hog operation, the finishing portion of it, to Iowa several years ago because corn was cheaper in Iowa than it was in Illinois.

    It just happened there's an ethanol plant about 10 miles down the road from our hog operations. And all of a sudden, corn is not cheaper in Iowa. So it's had a direct impact on us.