Over the last year, we’ve heard a lot about rising food prices because of the federal government’s mandates and subsidies for corn-based ethanol.
Here’s some more fallout — a major company closing a major plant with 1100 lost jobs resulting.
The country’s largest chicken producer, Pilgrim’s Pride, on Wednesday said it is closing its chicken processing plant in Siler City, N.C., with 830 employees, and distribution centers in five other states.
The company’s CEO attributed the problems directly to government ethanol policy:
Our company and industry are struggling to cope with unprecedented increases in feed-ingredient costs this year due largely to the U.S. government’s ill-advised policy of providing generous federal subsidies to corn-based ethanol blenders.
Based on current commodity futures prices the company’s total costs for corn and soybean meal in fiscal 2008 would be more than $1.3 billion higher than two years ago.
Talk about “stimulus packages.” Ethanol policy is a de-stimulus, de-stabilizing package. Policy makers worried about inflation, job losses, etc. need to look at undoing some of the damage they’ve created.