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Biofuels Bubble Lowers U.S. Meat Production,
Hits Plantings

April 11, 2007 (EIRNS)--U.S.A. farm regions have been hit by shortages of seed, fertilizer, and pressure to liquidate livestock, and other disruptions, as the North American Spring planting season proceeds under the insanity of the corn ethanol bubble, and economic breakdown generally. Yesterday's release of the monthly "Supply and Demand Report" by the U.S. Department of Agriculture, is receiving attention for its projection that U.S. meat production will decline in 2007, for beef, pork and broilers, for a total drop of one billion pounds in combined output. Per person, this means a yearly drop of 1.7 lbs. of consumption—about 1 percent. The decline in meat output is associated in part with higher feed costs as corn prices rose from their below-production cost level of $2.00 a bushel (typical of recent years) up to $3.50-4.00 (a price seen in 1996 and in years past).

Other patterns of chaos, from local reports:

  • Corn Seed Shortage. The 13 percent jump in the year-to-year U.S. corn planting area (intended), induced by the ethanol craze, has prompted the two biggest seed cartel companies, Monsanto and DuPont/Pioneer Hi-Bred to issue a caution on limited seed supplies. The biotech hybrids (resistant to herbicides, and protecting against cornborer, rootworm) are in short supply, especially in Kansas. "One reason it is so severe in Kansas is that a lot of the seed available for us is being used to replace cotton acres in Texas and Mississippi. But the shortage is nationwide," reported Terry Vinduska, sales representative for Pioneer Hi-Bred International (covered in the March 14 Kansas Hutchinson News). Seed for quick-maturing corn varieties is now unavailable at all, according to recent farm media reports.

  • Fertilizer Shortages; High Prices. Prices and supplies of nitrogen fertilizer all over North America are affected by U.S. corn expansion. The area in U.S. soybeans—a crop not needing nitrogen fertilizer—is expected to drop by 5 million acres, while 12 million "new" acres of nitrogen-using corn are sown. Anhydrous ammonia and urea are running at $450 to 480 per ton, record high levels. This reflects high prices of natural gas—the feedstock, but also the corn craze.

    "We have a shortage developing," explained Dave Franzen, Extension Soil Specialist for North Dakota State University, who stressed in an interview with The Prairie Star (March 31), titled, "What's the Reason for Record High Fertilizer Prices?": "You can't just call up St. Paul and have it come in, because they don't make nitrogen in the United States anymore. It's manufactured in countries like Kuwait and Venezuela, and you just don't call up Kuwait and ask them to send up a barge of nitrogen tomorrow. It doesn't happen and we have this huge shortage." Franzen pointed out that in the past, you had some normalcy to farm input needs. "It used to be fairly easy to predict. You had farm programs, and you used to plant so many acres of corn, so many acres of this and so many acres of that. Now, it's completely flexible and people can change their mind on a whim."

  • "King Corn" Hits Contingent Crops—Durum Wheat Planting May Drop Sharply in North Dakota. The March 30 Prospective Plantings Report by the U.S. Department of Agriculture, projected a 2007 corn crop area of 90.454 million acres, up 13 percent from 88.45 million in 2006. While this big increase is in line with the expectations expressed in 2006 by the biofool cheerleaders in Congress, in the Agriculture and Energy Departments, and on the exchanges in Chicago and Wall Street, back in the real world of the physical economy, havoc ensues. In North Dakota, for example, which accounts for two-thirds of all the durum wheat output of the USA, durum supplies are right now at their lowest early Spring level on record. But still, durum seeding may drop this year, depending on how much farmers switch to corn. Canada typically exports durum to the U.S., but planting intentions are likewise in question there for wheat, barley, canola, oats and other crops. On April 24 "Statistics Canada" will release its seeding projections.