It has been one hot and dry summer, especially for the Midwest where corn and soybeans are suffering from drought which causes the price of these commodities to soar. This causes 2 problems: 1- Animal producers are struggling to afford to feed their livestock and number 2 – Ethanol.  The government requires gasoline companies to purchase a certain amount of ethanol.  The ethanol industry has a significant impact on corn supply, “roughly half of the nation's corn supply this year will go to producing ethanol, that ethanol will make up only between 5 and 6 percent of the nation's fuel consumption”. 
In a good year, you probably won’t hear many complaints about whether to use the corn for food or fuel, but in a bad year, like this one, it’s a popular topic.  Animal producers are upset and feel that the gasoline companies are dictating the market.  While the farmer who is growing the corn or soy may not feel the pinch as much since the costs for these commodities are so high.  However, farmers producing corn are still upset because they are not getting the yield.  The corn yields are expected to be two-thirds less than what was planted this year. This causes yet another problem, lower yield results in ethanol plants not producing at capacity.  In some cases, ethanol plants are not even operating.
So now we have to figure out how to fix these issues.  The government will buy up to $170 million in surplus meat which will alleviate some of the pain for animal producers.  However for some farmers, especially small producers, it may be too late.  Also, some farmers may use byproduct from the ethanol plants to feed their animals.  If their ethanol plant is not running at capacity or has closed, these farmers are going to have to incur additional costs or go to another plant to feed.  If the price of corn continues to increase, gasoline companies may not want to buy the ethanol. From the consumer perspective, this means our food costs increase too. 
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Lindsey D.

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