Biofuel Policies and the Beef Industry

Harvest season is now here. I am looking forward to a nice infusion of cash from this year's sale of the corn crop from the farm in Nebraska.

I've been told that while we don't have a "bumper crop," the corn market prices will make up for any losses (we did have some hail damage several months ago).

Speaking of corn market prices, I saw an interesting article on beef prices in relation to the competing market for biofuel corn production from the Western Farm Press (I get regular reports from them via email). The article stated in part:

The question that often is asked is: What is the impact of changing biofuel policies on production agriculture? The answer requires solid data, and so does the question on evaluating production costs and herd performance for late-spring (early May) calving in contrast to the traditional spring (late-March, early April) calving in southwestern North Dakota.

Asking a question usually triggers a quick response that implies a simple answer is available. Seldom, if ever, is that true. Determining biofuel policy and its impacts on beef production systems is not simple.

Asking if increasing demand for corn by expanding market options would change prices is a simpler question than determining the biofuel policy impacts on beef production. Nevertheless, the questions are real.

As a participant on the producing end, what happens to the crop after it is sold to the buyer is not my concern. I am a free-marketer who believes in letting the free market (i.e., supply & demand) set prices without government interference. Too often, interference by the government with farm policy regulations written by clueless politicians cause more problems. Federal energy policies pertaining to oil by the current administration are insane anyway.

To read the full article, go here.