Ethanol and the egg

Posted: March 31, 2008 in Uncategorized

Rise in price of eggs is no chicken feed

Tom Abate, Chronicle Staff Writer

sfgate.com

March 22, 2008

[excerpted]

[…]

Data from the Bureau of Labor Statistics show that the average price of the soon-to-be-painted eggs rose 23 percent from $1.75 per dozen in February 2007 to $2.17 the same month this year.

Dave Kranz, spokesman for the California Farm Bureau Federation, said the price spike is the result of higher costs that farmers must pay for the grains that keep California’s hens a-laying – to the tune of about 4.9 billion eggs per year.

“The prices for chicken feed aren’t chicken feed anymore,” Kranz said.

And why does it take more scratch for farmers to buy the corn and soybean mixtures that constitute the main ingredients of chicken feed?

Daniel Sumner, director of the UC Agricultural Issues Center, said federal policies designed to encourage ethanol production have caused two separate shifts. Corn farmers have been selling more of their harvest to be processed into fuels, and that has driven up the cost of the part of the crop that goes into various animal feeds.

The lure of the ethanol market also has caused many farmers to replant what normally would be soybean acres into corn, Sumner said. The resulting drop in soybean acreage has boosted prices for that versatile crop, which is the other key constituent of henhouse cuisine.

“One-half of the farm price of eggs is the feed price,” Sumner said. “And about half of the retail price of eggs is the farm price.”

All of that makes for a strong and direct link between the ethanol-driven crop shift in the Midwest and the cost of acquiring a dozen of those Large Grade A ovoid canvases upon which children of all ages will work their decorative magic this weekend. (more…)

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