Ethanol subsidy boosts milk prices

Ethanol subsidy boosts milk prices

August 28th, 2011 in Opinion Free Press

You may have read an article in the Times Free Press noting that the price of milk in stores in our region has risen 40 percent in the past two years. One cause of that is the federal government's subsidy for corn-based ethanol.

What's the connection?

Well, cattle are often fed corn. But because of the 45-cent-per-gallon ethanol subsidy, a great deal of the corn produced in the United States is diverted to ethanol production. That raises the price of feed and thus raises milk prices.

The co-owner of a dairy in Ooltewah pointed out the rising cost of feed as one of the reasons we're paying more for milk. And a dairy specialist at Auburn University told the Times Free Press that "when corn goes up, everything seems to follow."

So what should we do? Congress should halt the ethanol subsidy.

But whether farm state lawmakers will agree to go along with ending the subsidy when many of their constituents benefit from it is doubtful. So, unfortunately, we'll probably keep paying more for milk to support the unconstitutional subsidy.