Tags: turkeys | corn | ethanol

High Turkey Prices Blamed on Corn for Ethanol

By Nat Helms   |   Thursday, 20 Nov 2008 07:16 PM

The ripple effect of corn’s being funneled to ethanol production instead of turkey feed has forced at least four huge turkey-processing plants to shut down this year, the government says.

Things will turn bleaker after the holidays, when the industry nationwide will reduce production dramatically, according to the U.S. Department of Agriculture.

That’s bad news for U.S. consumers. In 2007, the average American ate 17.5 pounds of turkey, according to the National Turkey Federation.

And this could be the last holiday season for some processors.

The Nebraska Turkey Growers Cooperative, that state’s only turkey-processing plant, will close after the holidays, according to the kearneyhub.com Web site.

The Gibbon-based plant includes 17 farms that produce more than 20,000 turkeys a day. In 2007, it prepared 65 million pounds of turkey for distribution.

Even though corn prices have dropped more than 50 percent since June, from nearly $8 a bushel to $3.55 today, that plunge won’t be reflected in the price of poultry for Thanksgiving. Those turkeys were fed with higher priced corn from the summer months, the USDA reports.

“The whole situation is a real turkey,” quipped a small-time poultry farmer in Calhoun County, Ill., who raises 1,000 turkeys a year for Christmas cash.

The USDA projects this year’s corn harvest at 12.3 billion bushels, which is 573 million more than it expected late in the summer and second in size only to last year’s harvest.

More than one-third of the harvest is destined for gas tanks, the agency says.

One thing is sure: All the experts say it is a good idea to budget a few extra dollars for a festive bird. Feed costs, coupled with the rising cost of oil and other utilities, have increased the cost of raising a turkey by as much as 8 cents a pound, or 35 percent, farmers say.

That cost ultimately will be reflected in the family repast.

Ethanol proponents claim that diverting corn to the gasoline additive does not explain the inflation that has struck supermarket aisles. Allied agriculture interests say turkeys will cost more because of high oil prices, lower soybean production, and fewer turkeys.

Holiday turkeys enjoy a daily feast of corn and soybeans to plump them up just in time for the table. But even soybeans have fallen prey to the push for ethanol.

Soybean production is down in response to demand for corn to make ethanol, which also drives up soybean prices, the USDA says.

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