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Farmers feel corn crunch

HENSEL, N.D. With corn prices on the rise from increased ethanol production, there is concern among livestock producers that high feed costs will reduce their profits, industry experts say.

HENSEL, N.D. With corn prices on the rise from increased ethanol production, there is concern among livestock producers that high feed costs will reduce their profits, industry experts say.

Don Heuchert, of Hensel, N.D., does not share that concern.

Heuchert, with his family's help, manages a farm growing small grains, corn and about 1,000 head of beef cattle.

"It's about time the corn farmer gets paid," Heuchert said. "Corn and barley have been sold so cheap for so many years. It's time it swung around the other way."

Concern heightened this week when President Bush called for the country to increase its total production of renewable fuels such as ethanol to 35 billion gallons a year by 2017. Farm groups applauded the goal, but some consumer groups cautioned that using corn to make ethanol would compete with corn's more traditional purpose: feeding people.


"I think the increases are a good thing for farmers," Heuchert said.

"Eventually, high-priced grains or feed will produce high-priced cattle or livestock."

Search for solutions

Heuchert and his brother, Neil, started working together in 1976 and gradually built up their operation. Don and his wife have four children who help out on the farm.

He said it's up to livestock producers to figure out how to use less corn for their feed to keep their costs down and profit margin up.

"I think in the past few years farmers have been using more feed alternatives to corn, as the price has gone up."

The alternatives can be found at the sugar beet plants, potato plants and local elevators in the area, according to Heuchert. The by-products usually are free, although the farmer pays for the labor and transportation to haul the load back home.

"I'm feeding my calves beet pulp mixed with corn silage, vitamin, mineral and protein supplements. They get plenty of the CRP hay too. I feed the cattle beet tailings and have been able this winter to keep them out feeding on the corn fields. We provide them plenty of shelter and water and they do just fine," Heuchert said.


Growing industry

The ethanol industry was booming even before Bush's comments this week.

North Dakota's ethanol plants in Walhalla, Grafton and Richardton produce about 85 million gallons a year. Plants under construction or in the planning stages would add another 315 million gallons a year, according to the North Dakota Corn Growers Association.

Minnesota has 16 ethanol plants that have the capacity to produce 620 million gallons of ethanol. With the addition of five new ethanol plants under construction, production will increase by another 450 million gallons.

A recent report released from the Minnesota Department of Agriculture showed that increased production of ethanol has generated economic growth in the state. The study predicted an economic impact of $5 billion and 18,000 jobs by the end of 2008.

The report also examined whether the corn supply could meet the demands of both the biofuels industry and feed markets. It showed that although there has been increased growth in renewable fuels in recent years, the ethanol plants in Minnesota processed only 15 percent of the state's total corn crop. Most of Minnesota's corn crop, 57 percent, was shipped out of state as a raw commodity, while 17 percent was used for animal feed.

Heuchert acknowledges that, in the short term at least, consumers might feel the impact of pricier corn. But that won't last forever.

"The next thing is, everyone will be planting corn, and the price will go way down. That's why a market is never a sure thing," he said.

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