ANALYSIS - Ethanol No Longer Seen As Big Driver Of Food Price

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ANALYSIS - Ethanol No Longer Seen As Big Driver Of Food Price

US: October 24, 2008

CHICAGO - Heavy demand for corn from ethanol makers was seen as a key driver of corn futures to record highs in June, but since then the sharp decline of corn along with other commodities shows that belief was mistaken.

Corn is down about 50 percent from its record high in June, even as the amount of the grain used to produce the renewable fuel in the United States remained the same.

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"We had adequate corn stocks, there was no shortage of corn, that wasn't the issue," said Don Roose, analyst and president of US Commodities, West Des Moines, Iowa.

"What we got into is the dollar went so low, crude oil went up and that inflated a lot of things...it was that factor of the least resistance moving up...it was an all-in attitude in the commodity markets in general no matter what it was."

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(Reporting by Sam Nelson; Editing by David Gregorio)
Story by Sam Nelson
REUTERS NEWS SERVICE

but it doesn't explain the cost for feed corn which has been in short supply and drove prices up for meat & poultry. Those prices have remained steady or risen in many cases.

Hay is selling for $180.00 a ton and ranchers that don't or didn't get enough for the winter are really hurting.
In the paper yesterday was a guy that let 120 cattle starve to death. Why didn't he sell??? Who knows.

Trying to even find hay in this area is difficult as most, if not all, the big hay farms are already subcontracted out to other state buyers.

This also affects the feedlots as they grind up hay as well as grain.

Cattle may very well go up this winter.