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News Center
Articles
There's More Than Corn in Indiana
By Derek Pillie, District Director
April 16, 2007
This column was first published by the KPC Media Group in the News-Sun (Noble & LaGrange Counties), the Evening Star (DeKalb County), and the Herald-Republican (Steuben County).
“There’s more than corn in Indiana….”
Even though my wife says I do a great impression of the crow from the well-known Indiana Beach commercials, you would be hard-pressed to believe his catchphrase if you’ve been following stories on our regional economy. The price of corn is going up, and it’s having a major impact on our area.
The demand for corn is primarily fueled by increased interest in ethanol. Over the last year, various initiatives to build new ethanol refineries have been touted in almost every county in our Third Congressional District, with some moving forward and others dropping off the radar screen. The increased interest in ethanol and other biofuels was sparked partly by a surge in gasoline prices, partly because ethanol is a domestic, renewable source of energy, and partly because of environmental concerns about other oxygen additives, such as MTBE.
Ethanol is not a new option for local corn producers. The New Energy refinery in South Bend, for example, has been in business for many years.
In an effort to reduce our nation’s dependence on foreign oil, Congress provided greater incentives to increase the production of ethanol. These incentives made it more cost-effective to refine ethanol and created a surge of interest in new ethanol refineries, as well as a surge in demand for corn to produce ethanol.
A few weeks ago, Congressman Mark Souder met with his Agriculture Advisory Committee and his deputy district director, Steve Howell (himself a Hoosier farmer), at Orchard Hills Farms in Kendallville to discuss the impact that these changes will have on agribusiness in northeastern Indiana.
Among other issues discussed was how the increased price of corn is having a negative impact on the local economy. Hard to believe? Despite the benefit to the corn producer, those who depend on that corn to feed their livestock are coping with an increase in their costs. Generally, that means that they take a loss since their products are traded commodities and they do not have the flexibility to set the prices for their pork, beef or milk.
Congressman Souder’s challenge in Washington, D.C., is to determine how to balance the need to expand more secure sources of energy with the structural changes such a policy creates for those who work hard to provide us with the food we need to feed our families. Every decision has its tradeoffs.
Some people forget that as much as our local economy is driven by manufacturing, it’s also driven by agriculture. While the perception is that agriculture has been shrinking as farmland is converted to housing additions and other projects, the reality is that Hoosier farmers continue to innovate to increase their yield and improve their productivity.
Any change in supply or demand can have a vastly different impact on individual farmers depending on what they raise or grow and how much of it they produce. Congressman Souder believes that we need to aggressively defend our local agriculture industry while not placing restrictive measures on the industry that may come back to hurt consumers who just want to put food on the table for their family. We also need to ensure that our nation continues to reduce its dependence on foreign oil by producing domestic energy sources such as ethanol.
Derek Pillie is Congressman Souder’s district director, based in Fort Wayne.
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