The law of unintended consequences has come around to kick us in the pants. Originally well-meant passage of laws requiring ethanol to be added to gasoline have raised our gas prices and at the same time endangered the survival of many California dairies.
Here’s how this works:
In this country, ethanol is made from corn. During one of the many oil-price spikes over the years, Midwest corn farmers and their legislators decided it would be wise to use corn to make ethanol, which is an additive for gasoline. It isn’t as good an additive as originally was thought, but we won’t go into that here. Suffice it to say that ethanol distillers cranked up their factories and corn growers cranked up their planters and harvesters, and all was well for a while. As you probably remember, we have an ethanol plant in Madera County, on Avenue 12, but it has lain idle for several years, ever since ethanol production overwhelmed demand and federal subsidies disappeared.
Along came this year’s Midwestern drought, accompanied by a shrunken corn crop.
We’re still required to use ethanol, which uses the corn, and which has raised the price of the corn that made it through the drought.
Now, some dairy farmers are feeling the pinch of those high corn prices, because their cows eat corn. Estimates are that as a result of high corn prices and relatively low milk prices (the result of overproduction), at least 100 California dairy farms are likely to go broke.
Herds already are being thinned in the Valley, but thin herds don’t make the fat mortgage payments many dairy farms have hanging over them.
On Tuesday, when this Maderan filled up his car, he noticed gasoline was almost twice the price per gallon as milk.
We are likely to feel the effects of these developments in Madera County, where dairying is one of our biggest agricultural enterprises.
Start drinking a lot of milk and eating a lot of cheese, please.