Sunday, January 14, 2007

Government Subsidies Cause Beef and Pork Prices to Rise for Barbecue Enthusiasts

Brace yourselves barbecuers, because the prices of pork butts and beef briskets are likely to continue rising.

The popularity of ethanol for fuel programs initiated by the government to combat rising gasoline prices are contributing to rising demand for corn. Cattle and pork producers will demand higher prices for their products, or be forced out of the industry.

According to an article posted at,

"The ethanol industry receives government subsidies of $1.53 per bushel of maize and a blender’s tax credit of $0.51 per gallon of ethanol and there’s a federal mandate on ethanol production." These incentives have the ethanol industry growing at an almost unbelievable pace," said Gene Gourley, a pork producer and swine nutritionist from Webster City, Iowa, testifying on behalf of NPPC and IPPA. "New plants are springing up everywhere, and they’re using a lot of corn."

These government subsidy programs are robbing from Peter to pay Paul, it appears. Subsidizing one agricutural industry (corn production) in spite others (beef and pork production) will likely lead to higher costs for barbecuing meat.

Basic economic forces of supply and demand will put dual upward pressures on prices for meat. As costs of production increase, one of two things will happen: 1) the smaller beef and pork producers will leave the industry, or 2) the costs will increase for producers still in the industry. Neither scenario looks postive for barbecuers.

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