Milk Prices Near Record Highs

You have to feed cows if you want milk, and most farmers feed their cows corn. So if corn becomes the fuel of the future, it starts to become very expensive cow food. And that means customers will pay more for milk at the local grocery. Federal ethanol subsidies have led to a boom in corn plantings, and record-high prices per bushel, setting the stage for increases in milk costs that are nearing records themselves. Corn is pervasive in the American food system -- just think how many times you've said to yourself, "there's corn syrup in that?" as you perused ingredient lists. While the increase in corn prices is affecting the cost of many foods, milk shows the effect faster because a conspiracy of other forces are also driving up its cost. Of course, corn has been so pervasive in the American food system in large part because it's been so heavily subsidized for so long. One possible consequence of this tectonic shift in the American heartland, as biofuels of all stripes take off, is we might start feeding cows more grass, which is what naturally fuels them anyway, according to a story in the June 20 Atlanta Journal-Constitution.