business news in context, analysis with attitude

The Chicago Tribune reports that "pork and beef prices are expected to see increases as producers struggle to pay more for feed. The era of corn-based ethanol has warped a food chain that links remote farms to city diners, costing consumers more and causing many farmers stuck in the middle to suffer massive losses on each animal they raise.

"The corn and soy meal devoured by hogs is worth $30 more than the animal itself, while feedlots lose $150 on every head of steer sold to meat packers. Of the 13 billion bushels of corn harvested last year, about 46 percent became animal feed and 25 percent became ethanol. Organizations such as the National Corn Growers Association say the country has enough corn to meet its needs, but supply and demand meet at an imperfect angle for their livestock peers. Unless corn dips below its $6-a-bushel plateau, and soybeans prices sink beneath the teens, the livestock industry likely will take steps to further raise prices."

USA Today reports that "the government says egg prices have soared 34.8% in the past 12 months, to an average $2.20 a dozen." Why? Well, start with the cost of the feed used for the chickens that lay the eggs – it is made up of 57 percent corn, and 26 percent soybeans.

Corn is getting progressively more expensive because of global demand and pressures from biofuels, the paper notes, and "soybean prices have risen even more than corn prices in the past 12 months, in part because many farmers switched from planting soybeans to corn last year. Many farmers are rotating back to soybeans this year, Elam says, in part because it costs less to produce an acre of soybeans than an acre of corn. But that, in turn, will push up corn prices this year."

KC's View:
When I was growing up, it used to be that eggs were an inexpensive dish when money was tight and my parents had to feed me and my six younger brothers and sisters. But not anymore. In fact, the number of products that would seem to fit in the "inexpensive dish" category seems to be shrinking precipitously.

What happens when suddenly low cost options don't exist anymore? Is this when we get to the point that Burt Flickinger was making about people combining human food with pet food?

This isn't a partisan political statement, because it seems to me that there is more than enough blame to go around. But do you have the same sense I do, that while there is sort of a "perfect storm" quality to all the issues that have come together at this point in time, there also is a case to be made that as a nation we have mismanaged our way into this crisis through a short-term, immediate gratification approach to governing and nurturing our resources?