Published on November 27th, 2014 | by Jo Borrás2
Ethanol is Not to Blame for Costly Turkeys
Both the American Farm Bureau and the Bureau of Labor Statistics are showing that turkey prices are still higher than usual. Despite what the people behind The National Turkey Federation lobby are saying, however, ethanol and the Renewable Fuels Standard are not to blame. But it’s drought and climate change, not ethanol, that are driving up food prices.
That’s something that even John Burkel, former head of the the Turkey Federation seems to agree with. “If there ever was an argument for a waiver or a partial-waiver to the RFS, it (was back in) 2012,” Burkel said in an interview with US News. “It’s not so much an anti-ethanol argument or anti-RFS argument … We’ve always said, ‘What happens when you have a drought?'”
What happens when you have a drought, for those of you who don’t understand how plants and farms work, is that you grow less produce. Less produce often means that prices go up as companies that depend on your product out-bid each other to get it, and then pass on the added cost of doing business to the consumers.
After a horrific Midwestern drought in 2012, US News reports that “the harvest in 2012 proved especially poor, as drought across the Midwest starved corn and soy crops, forcing farmers to pay more for the scarcer feed, and driving many out of business altogether. And the industry still hasn’t recovered.”
In this case, however, more expensive turkeys doesn’t necessarily mean a more expensive thanksgiving, as companies like Meijer- a regional grocery chain with 213 supermarkets in Michigan, Illinois, Ohio, Indiana and Kentucky- are using turkeys as a “loss leader” to get people into their stores. “A Thanksgiving meal really isn’t complete without the turkey,” said Matthew Craig, director of Meijer’s meat and seafood department, who put the birds on 50% off discount programs last weekend.
Still, things like “math” and “numbers” haven’t stopped the lobbyists from trying to blame whatever they can on ethanol and the Renewable Fuels Standard. And, for those of you who might listen to people who would blame the high corn prices “blamed” on the RFS, consider that corn prices …
NASDAQ Corn Price History
… are, in fact, very, very low at the moment, despite the increased use of corn-based ethanol by American consumers and plans to expand the fuel’s use to the US military. Of course, military leaders tend to have their heads in the future, as opposed to the dark, smelly place most ethanol opponents keep their heads (hint: it’s up the butt!).
Economists at Purdue University told the Chicago Tribune that turkey production could being to recover from the 2012 drought next year- assuming the drought in California doesn’t keep spreading Eastward- thanks to low cost feed benefitting from corn’s historically low adjusted prices. “The low-priced feed is just coming in now,” said Corinne Alexander, an agricultural economist at Purdue University in West Lafayette, Indiana. “By next year, we’ll be looking at lower turkey prices.”
So, that’ll be good news. Until then, though, keep your BS detectors at maximum- and be especially wary of people who cite things like BTU density as the end-all, be-all of understanding fuels. I’m sure they’ll show up, however, and I’ll be sure to personally insult their characters and question the parentage of their children in the comments section at the bottom of the page. Get your flame suits ready, pop some popcorn, and enjoy the show!